The need to develop broader plans for public intervention has become more acute with the intensification of the financial market turmoil and the increasing awareness that the current turmoil has the potential to jeopardise financial stability and, ultimately, macroeconomic stability in the world economy.
The interest rates on the overnight lending and deposit facilities were likewise raised accordingly. In deciding to hike the policy rate during the quarter, the Monetary Board noted that the increase in inflation expectations and in the risks of possible second-round effects argued for timely and decisive monetary policy actions from the BSP.