Extended policy tightening by the Bangko Sentral ng Pilipinas (BSP) could help cushion the weakening of the peso against the dollar, according to a report by Philstar Biz. The central bank's continued monetary tightening is seen as a measure to support the local currency, though the impact may be limited if energy prices spike further.
The BSP has already raised interest rates several times this year to combat inflation and stabilize the peso. Analysts expect further rate hikes in the coming months as the US Federal Reserve maintains its aggressive tightening stance, which has strengthened the dollar against emerging market currencies.
While tighter monetary policy can help support the peso, the report cautioned that external factors such as global energy price shocks could offset these efforts. The BSP remains vigilant and ready to adjust policy as needed to maintain price stability and support economic growth.