BSP chief on depreciating peso: Calm down, we’re on the right track

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  • BSP governor allayed fears on peso depreciation
  • He said freefall not expected due to country’s strong economy
  • He also PH has enough foreign reserves to maintain peso’s stability

MANILA, Philippines – Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla Jr. allayed fears of the peso possibly freefalling after it went down to P51 per US dollar before finally closing at P50.98 last Friday.

According to Espenilla, the country’s strong economy guarantees the peso’s stability amid growing uncertainties in the global market.

“We don’t expect it to do a free fall because of our economic fundamentals now, unlike before, are solid and very strong. This is reflected in our investment grade rating,” GMA News quoted him as saying. “As the recent IMF Mission observed, we’re doing well and the economy is not overheated. Nonetheless, the BSP stands vigilant. Let’s calm down. We’re on the right track.”

Pointing to the recent tensions brought on by North Korea’s confrontation with the United States, Espenilla explained that the peso will be expected to stabilize itself once the crisis d**s down.

“The peso is market determined. It’s natural for it to show volatility as it adjusts to market conditions and all the short-term uncertainties such as increased tension in North Korea,” he said. “The peso is capable of correcting itself as the market calms down and digests the relevant information. Moreover, BSP will always be there strategically if volatility is considered excessive.”

The BSP chief added that in case an emergency happens, the country still has enough foreign reserves to stem any further depreciation of the peso.

“We have a huge pile of foreign exchange reserves to play an effective stabilizing role. The Philippines is an emerging market economy that wants to grow,” he said.