Philippine central bank Governor Eli Remolona has stated that the authorities are prepared to take stronger action in the foreign exchange market if the peso’s weakening threatens to increase inflation in the country.
He explained that the effect of changes in the exchange rate on inflation depends on the size of the peso’s depreciation. The central bank has carefully calculated a threshold level that signals when the peso’s decline could start to significantly impact inflation rates.
In an interview with CNBC on Friday, Remolona said that once this threshold is reached or crossed, the central bank would act more decisively to stabilize the currency. He emphasized that the response would be stronger than previous interventions.
This approach shows that the central bank is closely monitoring the peso’s value and its potential impact on prices. By being ready to step in more forcefully, the authorities aim to keep inflation under control and protect the purchasing power of Filipinos.
Remolona’s comments come amid ongoing concerns about currency fluctuations and their effects on the economy, highlighting the central bank’s commitment to maintaining financial stability.
