FINANCE Secretary Benjamin Diokno is open to the possibility of the peso touching the 60-level against the US dollar but said interventions will continue to prevent the local unit from overshooting the said level.
“Pwede naman kasi mag-exceed ng one day tapos babalik naman sya (It can exceed for a day but it will go back),” he told journalists on the sidelines of a forum in Taguig City on Monday, Oct. 24.
To date, the peso is trading at 58-level against the US dollar but it has closed to its record-low of 59.00 to a dollar several times so far this month.
Diokno believes that despite the current performance of the peso, which is affected by the strengthening of the greenback due to the continued hikes in the Federal Reserve’s key rates, it will improve as the year ends due in part to the seasonal inflows of remittances from overseas Filipino workers (OFWs) and the revenues of the business process outsourcing (BPO) sector.
He said the peso is seen to regain its footing to around 55-level because of the backing of fundamental factors such as the inflows from Filipino workers abroad.
Last week, Diokno said the Bangko Sentral ng Pilipinas (BSP) can utilize around USD10 billion of the country’s foreign reserves to help buoy the local currency.
He said he came out with the figure after asking his staff to compute the possible inflows from OFWs and the BPO sector toward the end of the year.
He said his position is the same as BSP Governor Felipe Medalla although his stand is more specific.
He also clarified that any decision on this depends on the decision of the seven-member policy-making Monetary Board (MB) of the BSP, which he is part of.
He continues to see additional 100 basis points increase in the central bank’s key policy rates until the rest of the year, which can be done either by 50 basis points each in the next two rate-setting meet of the MB or by 75-25 basis points.
The next rate meetings of the MB are scheduled on Nov. 17 and Dec. 15.
Diokno said the rate hikes are seen to counter the impact of the Fed’s own rate hike decisions but clarified that the MB will not match the level of a rate increase by the Fed. (PNA)/PN
