By Lee C. Chipongian Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. said central bank actions “remain appropriate for the situation” amid rising inflation and a volatile exchange rate. Espenilla was commenting on some of the market sentiments that equity and the exchange rate could receive some reviving support if and when the BSP decides to move policy stance – which last saw action back in September 2014. “In my view, the sum of BSP actions remain appropriate for the situation,” he said. He points to BSP’s open market operations such as its weekly auction of term deposit facility (TDF) which not only absorb extra liquidity but also brings market rates closer to BSP rates, as helping to keep things appropriate. “We’re satisfied that TDF rates have been moving in the right direction as guided and enabled by our open market  operations,” said Espenilla. “This is having the desired effect on other market rates that in turn help regulate the economy and control inflation. The signal can be further reinforced by other BSP actions as deemed necessary by developments. That’s what the Monetary Board will decide on the May 10 policy meeting.” As for market sentiments and their concern about BSP’s apparent inaction as far as rates policy is concerned, the BSP chief said there “seems to be analytical confusion in those loose comments.” “We have to look at the fundamental drivers and not be too quick to play the blame game. For example, the key drivers of equity markets are corporate fundamentals including relative valuation that links potential earnings to share prices. There is market discipline to this. Corrections happen as a reality check. That’s healthy and makes for sustainability,” he added. Espenilla said earlier that they several policy tool substitutes to ensure financial and price stability, and execute what he called measured policy response. Protecting the inflation path or the target range is the BSP’s primary objective. On its last policy meeting on March 22, the central bank estimates inflation will average at 3.9 percent for this year and three percent in 2019.