To forestall a situation where our inflation target could be breached and to prevent potential asset bubbles, the BSP implemented a series of pre-emptive, calibrated monetary measures to tighten monetary conditions. Among others, we raised reserve requirements, our policy rate and also our SDA rate.
We did these in steps to help guide the market’s inflation expectations and to help the market better appreciate the risks inherent in the shifts in the monetary policy stances of major central banks, especially the US Fed. We also carefully communicated our policy intent to the market. At the same time, international oil prices started to drop.