Bangko Sentral to assess impact of interest rate cuts

The Bangko Sentral ng Pilipinas would study the effects of its last two interest rate cuts and see if there is a need to keep rates unchanged during Thursday’s Monetary Board meeting.   Various factors, like inflation risks and changes in the economic environment since interest rates were last adjusted March 1, would be considered, BSP Governor Amando Tetangco Jr. told reporters in an interview Wednesday.   “What we will be looking at are changes in the operating environment since the last policy meeting and implications on future inflation,” he said.   “We will also assess the impact of the last two policy rate adjustments. We will make an assessment of these factors to see if there is a need to adjust or keep policy rates unchanged,” he added.   The policy-setting Monetary Board cut interest rates by a cumulative 50 basis points to a record low 4 percent for overnight borrowing and 6 percent for overnight lending.   The first adjustment of 25 basis points was made last Jan. 19.   “There are still factors we need to consider in the environment including oil prices,” Tetangco said.   Societe Generale SA and HongKong and Shanghai Banking Corp. expected the BSP to take on a wait-and-see position on policy rates.   “The next meeting will be on April 19 and status quo is expected. April should see another round of indirect easing on the back of the new non-remuneration unified reserve requirement,” said Societe Generale strategist Wee-Khoon Chong.   HSBC economist Trinh Nguyen said the slowdown in the growth of dollar remittances from overseas Filipinos for two straight months might prompt the BSP to just keep policy rates steady the rest of the year. —VS, GMA News