Bangko Sentral ng Pilipinas (BSP) Governor Benajmin Diokno assured that the peso which has depreciated by 3.5 percent against the US dollar since the start of the year remains “relatively stable”.
Diokno said the “manageable weakening of the peso” was in line with the behavior of other emerging market currencies as “demand for the dollar rises amid the anticipated policy normalization by the US Federal Reserve.
He said the BSP’s policy of a flexible exchange rate “helps protect the peso against speculative attacks.The market-determined exchange rate is our first line of defense against external shocks,” he said during a virtual chat with clients of Japanese financial services firm Nomura Holdings.
The peso opened at P49.95 before closing at P49.91 against the US dollar Tuesday.
Diokno shrugged off worries on the peso, saying the country’s strong macroeconomic fundamentals, foreign exchange inflows and buffers are sufficient to shore up the currency and support the Philippine economy’s recovery.
“Our hefty GIR (gross international reserves), steady inflows from remittances and BPOs (business process outsourcing), and recovery of exports and FDIs (foreign direct investments) will support the peso.”
The GIR stood at $108.05 billion as of end-August, boosted by the $3.99 billion reserves in Special Drawing Rights (SDR) from the International Monetary Fund.