By Lee Chipongian
The peso hit an 11-year low of P51.08 to the US dollar on Friday but it was no cause for worry, according to the central bank chief.
“We’re constantly monitoring peso development for excessive short-term volatility,” Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. said Friday. They specially watch peso movements that are “not consistent with underlying economic fundamentals and take appropriate action when necessary.”
“We recognize that the market is also often self-correcting,” Espenilla added.
The peso opened higher at P50.90 from Thursday’s closing of P50.79.
Citi managing director Johanna Chua, head of Asia Pacific economic and market analysis, said they think the peso will close at P51.1:$1 this year and that the current level is just a natural adjustment, a reaction of global and regional foreign exchange or FX movements.
A number of countries have weaker currencies, said Chua. “Weaker exchange is a natural buffer (and we often see) the BSP talking sanguine about the weaker currency.” In the next months, she said their “bias and expectation of peso-dollar dollar exchange (is it) will head higher.” The bank’s P51.1 forecast is good for six to 12 months.
Metropolitan Bank and Trust Co. research group expects the peso to range at P50 to P50.95 this week.