BSP: Peso strongest among Asian currencies this year

The peso posted the highest appreciation among Asian currencies to date but is among the lowest in terms of volatility, with both performances, reflecting positive of the economy.

A strong peso, however, hits the exports sector hard and reduces the value of remittances sent mostly in US dollars by Filipinos working abroad to their relatives in the country.

Bangko Sentral ng Pilipinas (BSP) data showed as of July 2, the local unit has appreciated by about 4.33 percent against the US dollar.

“The appreciation has reflected the positive development in the economy particularly the improved fiscal position as well as the continuing external liquidity of the economy plus of course the robust GDP (Gross Domestic Product) growth that we experienced in the first quarter,” BSP Gov. Amando Tetangco Jr.

The Singapore dollar came in second after strengthening by 2.70 percent; followed by the Thai baht at 0.44 percent and the Malaysian ringgit at 0.40 percent.

The New Zealand dollar rose by 4.18 percent and the Australian dollar by 1.42 percent.

On the other hand, India’s rupee depreciated the most at 4.34 percent; followed by Indonesia’s rupiah at 2.82 percentl and Japanese yen at 2.44 percent.

Also, the Euro has depreciated by 2.32 percent against the dollar during the same period.

In terms of volatility, the peso’s stood at 1.14 percent as of Monday this week. This was followed by Singapore dollar’s 1.20 percent, baht’s 1.38 percent, rupiah’s 1.72 percent and ringgit’s 1.93 percent.

The yen’s volatility stood at 2.53 percent and the rupee at 4.76 percent. Also, the Euro’s was at 2.23 percent, Aussie dollar at 2.93 percent and the New Zealand dollar at 3.10 percent.

Tetangco said the local currency “continues to be market determined” and is “moving in line with other currencies in the region.”

“I think now the peso is probably ahead in terms of value vis-a-vis the other currencies but that’s how the market perceives the currencies and we are just allowing the market to determine the rate. At the same time the volatility is one of the lowest,” he said.

“It really depends on how the market perceives the development. But looking at the prospects, I believe that our economic indicators will continue to provide fundamental support to the peso. It is a market rate,” he said. PNA