Espenilla cites ‘healthy volatility’ in peso rate

Published April 17, 2018, 12:00 AM

by manilabulletin_admin

By Lee C. Chipongian

Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. continues to see “healthy volatility” in the local currency, despite that the peso has lost four percent so far this year and pressures to weaken it further are not going away.

“It’s showing volatility but it’s healthy volatility,” said Espenilla. “We’re not seeing rapid sudden changes.”

Nestor A. Espenilla Jr.
Nestor A. Espenilla Jr.

The peso averaged at P50.50 to the US dollar in January, P51.78 in February, and P52.07 last month. In the first two weeks of April, it is still ranging at P52.

Espenilla said the peso will find its appropriate level. “It seems to create a momentum of its own.”

“And, at the same time,” he added, “we (are) also realistically looking at the real exchange rate and based on that metric, it seems to be aligned with what is appropriate to maintain a competitive exchange rate.”

Espenilla said the market should always consider the underlying fundamental of the local currency and the environment around the exchange rate. Because of strong fundamentals, he stressed that the peso “is not going in (only) one direction (and) it’s healthy for the peso to show movement in both directions.”

The peso is market driven and demand for the US dollar continues with the country’s increased imports for infrastructure development, as well as residents’ outward investments, and debt repayments of both the government and corporate sector.