BSP may cut rates in April due to receding inflation

A former Bangko Sentral ng Pilipinas (BSP) official suggests that the Monetary Board may cut interest rates in April due to receding inflation.

Diwa C. Guinigundo, a former deputy governor and current GlobalSource Partners Country Analyst, noted that February's actual inflation rate of 2.1% is within the BSP's target range of 2-4%, providing justification for a potential rate cut.

BSP Governor Eli M. Remolona Jr. indicated that a rate cut remains on the table at the Monetary Board's next meeting on April 10, despite an unexpected decision to maintain rates steady last month.

Guinigundo emphasized the need for caution due to global trade uncertainties and potential domestic policy adjustments affecting inflation.

He also highlighted the risk of capital outflows if the differential between the Federal funds target rate and BSP's policy rate narrows significantly.

Additionally, Guinigundo mentioned that political noise surrounding former President Rodrigo Duterte's arrest could impact the peso's stability, though current bond inflows are helping to stabilize it.