What is BSP’s view on the inflation outlook? In our Third Quarter Inflation Report, released in October, we noted that our short run prognosis points to subdued supply pressures and uneven demand conditions. Subsequently, on November 2, the monetary board decided to maintain the BSP’s key policy rates.
Risk is being re-priced in a wide range of markets. Emerging market bond spreads have moved out a little, though US domestic spreads are little changed. Share prices have softened recently in a number of countries, and especially in Asia. The US dollar has firmed against most currencies.