The BSP's move was meant to support or at least stabilise the peso exchange rate, said Michael Ricafort, economist at Rizal Commercial Banking Corp in Manila.Ī weak peso adds further pressure on inflation, threatening to derail recovery of the consumption-driven domestic economy. The Fed is seen stepping up its tightening campaign with a supersized 100 basis point rate hike this month after a report showed inflation racing at four-decade highs. The peso is the worst-performing currency in Southeast Asia this year as the greenback continues to strengthen on expectations for faster Federal Reserve policy tightening. dollar, recovered some lost ground and was last up 0.3%. The Philippine peso, which had hit a record low early this week versus the U.S. 9, "is very likely (to be) strong or even stronger than first quarter numbers", he said. The second-quarter GDP growth, which will be announced on Aug. The 6.5%-7.5% growth target for gross domestic product set for this year by the newly installed Marcos administration remains within reach, BSP Deputy Governor Francisco Dakila said in a media briefing. It would remain supported by the easing of COVID-19 restrictions and structural reforms, he added. read moreįinance Secretary Benjamin Diokno said the economy remained robust and could thus absorb Thursday's interest rate rise. Inflation surged to the highest level in nearly four years in June, and is widely expected to remain elevated, pushing the full-year average beyond the target band of 2% to 4%. 18 meeting, and policy moves remained data-dependent. Medalla said the BSP would still hold the Aug. The central bank previously raised interest rates by 25 basis points in May and again in June. No such move was expected on Thursday because the BSP did not have a regular policy meeting scheduled until Aug. The rates on the BSP's overnight deposit and lending facilities were also raised by 75 basis points, to 2.75% and 3.75%, respectively. "In raising the policy interest rate anew, the Monetary Board recognized that a significant further tightening of monetary policy was warranted by signs of sustained and broadening price pressures amid the ongoing normalization of monetary policy settings," Medalla said. In the Philippines, the rate on the key overnight reverse repurchase facility (PHCBIR=ECI) rose to 3.25%, BSP Governor Felipe Medalla said in a statement.
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