All eyes will be on the central banks of both the Philippines and the United States this week after the local bourse nearly dipped to 6jilievo online gaming,500 on monetary policy jitters.
Trading platform 2TradeAsia.com said in an advisory over the weekend that the Bangko Sentral ng Pilipinas (BSP) had some leeway to slash interest rates by 25 basis points for a third time during its Dec. 19 meeting.
This development was the latest milestone for the company, which has seen its local market grow in value to multiple hundreds of millions of pesos annually.
If this happens, the benchmark rate will fall below 6 percent.
Article continues after this advertisementThis is due mainly to “relatively more behaved” domestic inflation, according to 2TradeAsia.
FEATURED STORIES BUSINESS BIZ BUZZ: Marcos bats for brown rice BUSINESS UK officially joins Indo-Pacific trade bloc BUSINESS Megaworld to launch 3 new townships in ’25It also warned, however, that the Federal Reserve’s meeting on Wednesday, Dec. 18, may still “have ripple effects at home, especially as we approach 2025 at a more fragile peso-dollar positioning.”
The BSP’s monetary policy stance often influences local equities, as a rate cut can boost investor confidence, with traders snapping up shares.
Article continues after this advertisementIn contrast, a rate pause or hike can dampen sentiment and cause investors to shed stocks.
Article continues after this advertisement Inflation spikeLast Friday, the benchmark Philippine Stock Exchange Index (PSEi) closed at 6,615.51, down by 1.67 percent week-on-week as traders sold some stocks ahead of the central banks’ meetings.
Article continues after this advertisementAverage value turnover was at P6.7 billion, up by 10.14 percent versus the same period the previous week.
This week, 2TradeAsia sees the market’s immediate support at 6,500 and resistance at 7,000.
Article continues after this advertisementLast week, analysts said the inflation spike in November had strengthened the case for another rate cut. This, in turn, could give the economy a boost after a weaker-than-expected third quarter. —Meg J. Adonis INQ
Subscribe to our daily newsletter