(Bloomberg) — The Philippine central bank is open to delivering another rate cut in its first monetary policy meeting next year, Governor Eli Remolona said Friday. Shares gained.
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While the Federal Reserve is less dovish now, the Bangko Sentral ng Pilipinas is “still at the same trajectory as before” on monetary easing, Remolona said in an interview with Bloomberg Television’s David Ingles and Annabelle Droulers.
“We ourselves are neither more dovish nor less dovish,” the central bank chief said. Core inflation will likely slow next year, Remolona added, supporting the case to further ease the policy rate which he described as “still somewhat restrictive.”
The nation’s benchmark stock index rose as much as 1.3% after Remolona’s comments, snapping seven sessions of declines and bucking losses in the region. The Philippine peso also gained on Friday after closing the day before at the record low of 59 to the greenback, a level that has served as a key support since 2022.
Remolona said he’d be comfortable should the local currency depreciate to 60 against the dollar, as long as the move is smooth and slow. “We’re more concerned about the volatility than about the longer-term depreciation.”
The BSP capped off the year with a third quarter-point rate cut on Thursday, as inflation remained on target and economic growth slowed. It also signaled more rate cuts next year at a measured pace.
At the same time, the BSP flagged potential price risks from geopolitical developments, as the world contends with uncertainties over incoming US President Donald Trump’s economic policies.
Read: PHILIPPINES REACT: BSP Cuts Again, Will Be More Cautious in 2025
Trump’s win has triggered a resurgence in the US dollar, causing currencies around the world to slump. The BSP has been “more active than usual, but not that active” in the foreign exchange market, Remolona said Friday.
The central bank chief said that monetary authorities are watching the peso “very closely” to ensure that its weakness won’t fan inflation in the Southeast Asian nation that imports oil and rice needs.
–With assistance from Joanne Wong and Cecilia Yap.
(Updates stock index move, adds governor’s peso comment.)
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