BSP intervenes to keep peso below 50:$1

MANILA, Philippines — The peso managed to stay below the 50 to $1 level despite shedding 10 centavos as the Bangko Sentral ng Pilipinas (BSP) continues to intervene in the foreign exchange market to smoothen the volatility of the local currency.

The peso closed at 49.90 to $1 yesterday, weaker than last Friday’s 49.80 to $1, but strongest in nearly three years or since closing at 49.63 to $1 in June 15, 2017.

It opened weaker at 49.83 before hitting an intraday low of 49.97 and an intraday high of 49.80. Total volume amounted to $651.3 million, lower than Friday’s $1.01 billion.

BSP Governor Benjamin Diokno said in a television interview with ABS-CBN News Channel that the peso is one of the strongest, if not the strongest, currency in the region.

Diokno said the Philippines is well prepared in facing a crisis such as the coronavirus disease 2019 or COVID-19 pandemic compared to the Asian financial crisis in 1997 and 1998 as well as the global financial crisis in 2008 and 2009.

“We are really in a very good shape, our reserve is at its highest at $90 billion in March and we feel it will be around $95 billion by the end of the year. Our banking industry is much, much stronger compared to where it was during the Asian financial crisis,” he said.

The central bank usually participates in the foreign exchange market to soften the volatility of the local currency by dipping into its gross international reserves to buy or sell dollars.

“We are already intervening. It could have gone much, much faster. It could have appreciated more if we did not participate in the market,” Diokno said.

The BSP chief said there is a need to keep the peso competitive to support the export sector

“I can tell you we are participating in the market,” he said.