The Bangko Sentral ng Pilipinas may keep its interest rates steady in 2019 but slash the reserve requirement by 300 basis points to ease liquidity pressures on banks, British banking giant HSBC said.
“Hiking cycles are coming to an end, thanks, in part, to a more dovish (US) Fed (Federal Reserve),” HSBC said in a research note dated Jan. 9.
In the United States, HSBC economists expect only one interest rate hike by the Fed this year.
“As a result, we remove our last rate hike forecasts for both Indonesia and the Philippines in the first quarter of 2019. We now see no change for both central banks in 2019,” HSBC said.
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The bank expects marginal monetary tightening in Singapore and Thailand in the second quarter of 2019.
In the meantime, it said the BSP was likely to cut the reserve requirement by 300 basis points this year to “ease liquidity pressures on banks, a risk for growth.”
