Key facts
- Philippine central bank warned banks against using forex derivatives for profit.
- The warning comes as the peso hit a record low.
- Banks were cautioned against profiting from currency volatility.
The Bangko Sentral ng Pilipinas (BSP) has issued a warning to banks regarding their use of foreign-exchange derivatives transactions. The central bank cautioned financial institutions against employing these instruments as a means to profit from the peso's recent slump, which saw it reach a record low against the US dollar. The BSP's directive aims to curb speculative activities that exacerbate currency volatility.