Amid the continued weak performance of the local currency.
On Tuesday, October 27, the Philippine Peso hit a new historic low after it sunk to the PHP64 threshold against the US dollar for the first time.
According to Bankers Association of the Philippines (BAP), throughout the intraday trading, the peso opened with a weak performance, as it started at PHP63.95 and reached as low as PHP63.9 and a high of PHP64.2, before closing at PHP64.17 against the dollar.
Prior to this, on Thursday, the Philippine peso alsp closed at the all-time low of PHP63.95—the seventh lowest level this month.
BSP RAISES TARGET REVERSE REPURCHASE
Meanwhile, in a separate development last October 22, the Bangko Sentral Ng Pilipinas announced that its has raised the BSP’s Target Reverse Repurchase (RRP) Rate by 50 basis points to 5.50 percent.
It also confirmed that the interest rates on the overnight deposit and lending facilities were adjusted to 5.00 percent and 6.00 percent, respectively.
The BSP noted that inflation is seen to accelerate further in the coming months as the average headline inflation is expected to remain high in 2027 and approach the 3.0-percent target in 2028.
“Core inflation is likewise projected to continue to rise, indicating underlying price pressures. Renewed tensions in the Middle East have driven global oil prices higher,” it continued, adding that the upside risks to inflation have also materialized with the recent increase in transportation fares and the El Niño conditions alsp pose a risk to agricultural production and prices.
Although, domestic economic activity is expected to recover, supported by fiscal measures.
In addition to that, the Monetary Board also recognized the need for a strong monetary policy response to broadening price pressures and further upside risks to inflation.
The BSP said that a decisive response will make monetary policy appropriately restrictive and will contain second-round effects and firmly anchor inflation expectations.
“The BSP stands ready to take further monetary policy action as necessary to ensure the timely return of inflation to the target, in keeping with our price stability mandate,” it added.
