MANILA - The Philippine peso remains stable despite trading weaker against the US dollar, Bangko Sentral ng Pilipinas said Thursday.
Peso depreciation is in line with its regional peers, BSP Gov. Benjamin Diokno said.
The flexible exchange rate arrangement, wherein the Peso’s value is determined by free-market forces, is an automatic "stabilizer" in the face of external shocks, he said.
Using the Philippine peso’s real effective exchange rate or R-E-E-R, the BSP said the peso has actually been quite stable.
“Using the REER measure, over the last five years, the peso’s performance has shown relative stability against the baskets of currencies of all trading partners (TPI) and trading partners in advanced (TPI-A) and developing (TPI-D) economies," Diokno said.
Even at the lowest rate, the exchange rate should not have an impact on inflation said BSP's Department of Economic Research Deputy Director Zeno Abenoja.
The P48 to P53 range is "broadly consistent" with the inflation outlook for the next 12 to 24 months, he said.
"We will monitor closely, but we think as long as the exchange rate is broadly stable, and within the range we are seeing right now, the impact could be manageable," Abenoja said.
Meanwhile, technical analyst Bonner Dytoc said the peso could depreciate further against the dollar.
“We’re range trading between 47.50 and 48.50 for a time, but around middle of June suddenly there was demand for the dollar and we were able to hit 51.30, around a week ago. It is already corrected a bit by closing around 50.43 yesterday. But if the trend still continues I think we could probably hit 51.50, 52 by the end of the year," he said.