By: CNN Philippines
The peso’s steady appreciation against the dollar can be sustained over the near term, the Bangko Sentral ng Pilipinas said.
Governor Benjamin Diokno said the sustained strength of the currency will keep prices of basic goods stable, as it will limit the impact of exchange rate fluctuations passed on to Filipino consumers.
The peso has been trading at the ₱48 level per dollar in recent weeks, ending Thursday’s trading at ₱48.63. This is the first time in three years for the peso to return at this level.
Since the start of the year, the peso has risen by 4.24 percent to close at ₱48.58 as of August 19, against the 2019 closing rate of ₱50.64 versus the greenback.
The BSP said peso also appreciated by 4.24 percent against other Asian currencies. Apart from the peso, only the Japanese yen, new Taiwan dollar, and the Chinese yuan gained relative strength against the dollar.
Diokno said the peso has drawn strength from what he called the country’s “sound macroeconomic fundamentals”, including the benign inflation environment, a strong and resilient banking system, a prudent fiscal position and a sufficient level of international reserves. The country’s improving credit rating— which was recently upheld by international credit raters — also boosted investor confidence, he said.
“The recent appreciation of the peso has also tempered the BSP’s latest inflation forecasts, offsetting the impact of higher international oil prices,” the BSP chief added during the latest GBED Talks.
The gradual reopening of the economy should also provide support to the peso.
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