The Bangko Sentral ng Pilipinas (BSP) is prepared to address foreign exchange volatility amid pressure from a strong dollar, as stated by BSP Governor Eli Remolona Jr. The recent decline of the peso to a 17-year low of P57.78 to the dollar was attributed to escalating tensions in the Middle East, leading to safe-haven flows into the US dollar.
This decline was influenced by likely delays to interest rate hikes and geopolitical concerns. Although the peso slightly recovered to P57.71:$1 on Friday, it remains above the projected average for this year.
The BSP continues to monitor the market and is ready to manage any unnecessary movement and excessive volatility. In 2022, the peso fell to a record low of P59 to the greenback due to aggressive monetary tightening by the US Federal Reserve, prompting the BSP’s Monetary Board to further tighten policy to maintain a favorable interest rate difference.
The central bank’s benchmark rate currently stands at 6.5 percent, the highest since 2007, after rate hikes totaling 450 basis points.
Source: PhilNews24 | April 27, 2024
