Business

Economic managers still not worried as peso hits 53 vs $1

Thursday, June 14, 2018

Crybaby_Diokno — Since taking office in March, central bank governor Benjamin Diokno has cut the benchmark rate by 25 basis points and announced a phased reduction in the reserve requirement ratio (RRR) for banks, reversing some of the monetary tightening last year. Inflation has eased to the midpoint of a 2 percent to 4 percent target while economic growth slowed to a four-year low.

MANILA – The peso hovered above the 53 to the dollar level on Tuesday, holding at its lowest level in 12 years, but economic managers said they were not worried.

The peso was at 52.94 to the dollar in late trading, from 52.84 on Friday, according to Bloomberg data. As of 5:30 p.m. on Tuesday, the peso hit P53.0777:$1.

Budget secretary Benjamin Diokno blamed the local currency’s weakness on the strong dollar.

The trade deficit widened to its widest in 4 months last April as growth in imports that drives dollar demand outpaced exports.

Diokno said a weak peso would increase the value of dollar remittances from Filipinos working abroad. Trade Secretary Ramon Lopez said a weak peso would make local goods cheaper for buyers abroad.

“The peso’s weakness throughout the year is expected,” said EastWest Bank senior vice president Rob Ramos.

Seasonal pick-ups in dollar remittances could help cushion the peso’s fall, which could settle at the P52.50 to P52.70 level by the end of the year. (ABS-CBN News)