BSP mulls ‘strong monetary policy action’ to address inflation

A security guard stands beside a logo of the Bangko Sentral ng Pilipinas posted at the central bank headquarters’ main gate in Metro Manila. REUTERS

MANILA – The Bangko Sentral ng Pilipinas has signaled it will further hike key monetary policy rates next month to ease rising commodity prices and volatility of the peso against the US dollar.

“For the next policy meeting in August, the Monetary Board is considering a strong monetary action to deal with persistent elevated inflation risks as well as our concern on the volatility in the foreign exchange market,” BSP governor Nestor Espenilla Jr. said.

The central bank’s policy-setting Monetary Board is scheduled to meet to decide on whether it will further adjust interest rates.

Espenilla said the BSP is considering a “strong follow-through” when monetary authorities meet next month.

First Metro Investment Corp. (FMIC) earlier said the central bank is likely to raise rates by another 50 basis points (bps) this year on accelerating inflation.

The BSP’s policy-setting Monetary Board raised policy rates by 25 bps each in May and June, as inflation expectations remained elevated.

Inflation has breached 5 percent in June, the fastest in at least five years. (GMA News)

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