BENGALURU: Equities and currencies in the Philippines retreated on Monday, ahead of a monetary policy meeting later in the week in the wake of strong economic growth in the third quarter and an inflation print still worrying the central bank.

The peso retreated 0.5% to 56.110 per dollar, while equities in Manila fell 0.6%. The South Korean won slid 0.7% to hit its lowest level since Nov. 3.

Last week, the Philippine central bank signalled it was willing to take further monetary policy action if needed to tame consumer price expectations, with risks to the inflation outlook leaning towards the upside even though recent data has shown strong economic growth in the third quarter.

Market participants are awaiting the policy decision from the Bangko Sentral ng Pilipinas on Thursday, with most analysts expecting no change to interest rates.

HSBC analysts said in a note the central bank was likely to maintain its “hawkish rhetoric given upside risks to inflation”.

Regional assets elsewhere were also subdued as market participants traded cautiously ahead of the US inflation data due on Tuesday, which could provide a clearer pathway on US interest rates.

Given that market consensus expects a further slowdown in the headline CPI and core CPI remaining unchanged, there could be some upside surprises, said Poon Panichpibool, markets strategist at Krung Thai Bank.

Panichpibool added that if inflation is higher than expected, it could be quite bearish for Asian currencies.

“If the US CPI inflation figures do meet the market’s expectations or below, I think it could help slowdown depreciation momentum across Asia FX,” he added. The Thai baht declined 0.3% while the Indonesian rupiah and the Chinese yuan slipped 0.2% each.