Analysts expect BSP to hold off raising interest rates

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Metro Manila (CNN Philippines, November 14) — The Bangko Sentral ng Pilipinas (BSP) is unlikely to raise interest rates again during its Monetary Board meeting on Thursday, analysts said.

The BSP had implemented back-to-back interest rate hikes for the past months as inflation continued to rise. The current interest rate is 4.5 percent. 

Analysts believe that with inflation staying at 6.7 percent in October, another rate hike might not be necessary.

"It's a hold. General sentiment on inflation is that it has peaked already. Core inflation has also eased," Unionbank chief economist Carlo Asuncion told CNN Philippines.

BDO Unibank chief market strategist Jonathan Ravelas has the same forecast.

HSBC Global Research, in a statement penned on November 8, said the government's more aggressive action versus rising prices would allow the BSP to take a breather.

"The effectiveness of the government's 'non-monetary' response, and the supply-side nature of inflation, affords the BSP an opportunity to hold off on further policy tightening at its next policy meeting," HSBC said in a statement.

ING Bank in a statement Monday said that the BSP will take a "hawkish pause."

"We believe BSP will leave policy rates unchanged given that inflation is expected to return to target even without action on Thursday. Despite the pause, we also see BSP retaining its hawkish stance, likely to indicate that it remains vigilant against any build-up in price pressures and that it stands ready to act if necessary," ING said.

The Monetary Board, the policy making arm of the BSP, will meet on November 15 to discuss policy rates.

CNN Philippines business producer Jil Danielle Caro and digital producer Luchi de Guzman contributed to this report.