The Philippines will consider another round of outsized interest-rate hike to keep the peso from weakening.
“It’s a question of whether it is 50 or 75 basis points,” Medalla said in an interview in Washington with Bloomberg Television on Thursday, when asked on the outlook for the next rate meeting. While a 75-basis-point move will ease pressure on the peso and cool inflation, it could impact the economic recovery, he said.
The peso dropped more than 13% this year, one of the steepest declines among major Asian currencies. Bangko Sentral ng Pilipinas raised the key rate by 225 basis points so far this year, the most in Southeast Asia. While the central bank may have already done enough as the forecast for inflation is already consistent with the target, “what the Fed does has a very significant effect on what we will do,” he said.
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