rate by 75 basis point to 3.25 percent to contain inflation and prevent the further slide of the peso against the US dollar
The BSP made the adjustment after the United States announced that inflation rate in June hit 9.1 percent, the highest in nearly 41 years, adding pressure on the Federal Reserve to make more aggressive interest rate hike which encouraged investors to invest in the US dollar. “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.Medalla said favorable conditions arising from the strong rebound in growth in the first quarter suggested that the domestic economy could accommodate a further tightening of monetary policy settings.