The rebalancing in global portfolios, as funds search for better yields, has surfaced in our domestic financial markets as volatility in the peso/dollar exchange rate, and in the local bond and equity markets. Going forward, should the uneven global growth scenario persist, we may see this translate into more pronounced changes in trade patterns.
Monetary policy thrusts: In response, the BSP has opted to use a mix of monetary policy tools over the last year. These actions included increases in reserve requirements on bank deposits, upward adjustments in policy interest rates, a strategic presence in the FX market, alongside a clear communication plan, and other macroprudential measures.