PHP Trades Defensively Ahead Of BSP Decision

Spot USD/PHP snaps its ten-day losing streak (on a closing basis), catching up with USD appreciation seen after the release of FOMC minutes. Locally, the main focus falls on BSP MonPol decision today.

• All but one economist surveyed by BBG expect the BSP to leave its main policy rate unchanged at 2.25%, with the lone dissenter looking for a 50bp cut.
• The Philippine government eased strict lockdown measures in the capital region yesterday, in an attempt to give some relief to the ailing economy, even as the country remains the epicentre of Covid-19 in Southeast Asia.
• BSP Gov Diokno announced an increase to the real estate loan limit of banks to 25% from 20%, noting that the move means additional PHP1.2tn of liquidity for real estate lending.
• The rate last deals at PHP48.64, 8 pips better off. Bulls need a rally past the 23.6% retracement of the May 18 - Aug 19 sell-off at PHP49.10, located just above several consecutive highs from early Aug. Bears focus on yesterday's multi-year low of PHP48.54 and a break here would expose the lower 3.0% Bollinger band at PHP48.29.