Philippine Central Bank Governor Medalla on Policy, Inflation, Peso

The transcript discusses the likelihood of rate hikes in response to inflation reports, with a focus on the impact of exchange rates and the need for policy adjustments. It provides a background on current interest rates, influenced by the pandemic, and the urgency to exit unconventional monetary policies. The conversation also touches on the challenges of meeting growth targets amid high inflation and the effects of exchange rate fluctuations on the economy.

What is the main factor influencing the decision between a 25 or 50 basis point rate hike?

• The stock market performance

• The current interest rate

• The number of board members

• The upcoming inflation reports

Why were interest rates historically low before the recent hikes?

• To encourage foreign investment

• As a reaction to the pandemic

• Due to high inflation

• To stabilize the currency

How do global economic factors like interest rate differentials affect domestic policy decisions?

• They only affect stock market performance

• They have no impact

• They influence exchange rates and inflation

• They directly determine domestic interest rates

What is the central bank's stance on using the exchange rate as a policy tool?

• They use it only in emergencies

• They do not use it

• They use it to control inflation

• They actively use it

What is the potential impact of a depreciated peso on inflation?

• It decreases inflation

• It increases inflation

• It has no effect

• It stabilizes inflation

What is the expected policy rate increase by the end of the year?

• 150 basis points

• 100 basis points

• 50 basis points

• 200 basis points

How does high inflation affect economic growth forecasts?

• It improves growth forecasts

• It has no effect

• It stabilizes growth forecasts

• It may require revising forecasts lower