Peso holding steady against dollar

MANILA, Philippines - The Philippine peso is in the middle of the range in terms of movement and volatility in Asia amid the weak economic growth in advanced economies led by the US and the sovereign debt crisis in Europe, the Bangko Sentral ng Pilipinas (BSP) said.

BSP Governor Amando Tetangco Jr. said in an interview that the volatility and appreciation of the peso against the US dollar remains healthy, allowing Filipino businessmen, including exporters and importers, to plan more effectively.

The peso closed at 42.8 to $1 last April 4 at the Philippine Dealing and Exchange Corp. (PDEX).

Tetangco pointed out that the volatility of the peso against the dollar as of April 4 was placed at 1.14 percent, followed by the Korean won at 1.15 percent, Singapore dollar at 1.16 percent, Thai baht at 1.38 percent and Japanese yen at 3.33 percent.

Currencies with lower volatility than the peso included the Chinese yuan at 0.19 percent, Taiwanese dollar at 0.87 percent and Indonesian rupiah at 0.95 percent.

In terms of appreciation, Tetangco pointed out that the peso appreciated 2.42 percent since the end of last year and was also in the middle of the range in the list of currencies in terms of movement against the greenback.

He said the Indonesian rupiah gained 0.22 percent, followed by the Chinese yuan at 0.34 percent, the Korean won at 2.29 percent, the Thai baht at 2.45 percent, the Taiwan dollar at 2.73 percent, the Singapore dollar at 3.59 percent and the Malaysian ringgit at 3.82 percent.

On the other hand, the Indonesian rupiah depreciated 0.22 percent followed by the Japanese yen at 6.13 percent.

Tetangco said the rate of appreciation of the peso was slower compared to the Thai baht, the Taiwan dollar, the Singapore dollar and the Malaysian ringgit.

“The Philippine peso was in the middle of the range in terms of volatility of the exchange rate as well as the rate of appreciation versus the US dollar,” the BSP chief stressed.

He said the competitiveness of the peso continued to improve as other currencies appreciated faster than the local currency.

Tetangco has reiterated that the BSP would not target a specific exchange rate and would only intervene in the foreign exchange market to avert sharp fluctuations of the peso.

He said the central bank’s foreign exchange policy remains the same which is to allow the market to determine the currency’s exchange rate.

The central bank has vowed to contain excessive volatilities in the foreign exchange market in order to “smoothen” the movement of the peso against the dollar to help business and consumers plan more effectively.

Other currencies continued to strengthen due to the weakness of the dollar brought about by the fragile economic recovery in the US as well as the strong growth in emerging economies particularly in Asia, including the Philippines.