Rupiah, euro suffered worse beating than peso — Asiaweek

Other currencies, including the euro and the Indonesian rupiah, have fallen more sharply than the peso against the dollar during the past year, according to a comparative study conducted by Asiaweek magazine.

The study showed that the peso fell 18.1 percent compared to its value against the dollar during the past year.

But the rupiah suffered more, diving by 22.6 percent against the dollar while the euro dropped by 21.7 percent.

Even the New Zealand dollar fell by 21.9 percent, while the Australian dollar plunged by 18.9 percent, the Asiaweek study showed.

Earlier, the Bangko Sentral ng Pilipinas (BSP) said the peso’s low exchange rate is normally due to the high demand for dollars used for imports and debt payment.

BSP director Diwa Gunigundo also noted that the hike in interest rates in the US prompted many investors to shift their assets from peso-denominated to dollar-denominated ones.

He rejected a suggestion by Senate President Pro Tempore Blas Ople to fix the foreign exchange rate at P50 to $1.

Gunigundo said the Philippine economy remains market-driven, and does not have the requirements needed to peg the peso-dollar rate.

He appealed anew to new players in the financial market to refrain from moving their funds out of the country and not to resort to speculative trading, which will only further erode the peso’s value.

The BSP official said the Philippine banking industry remains one of the most stable in Asia, with superior capital adequacy and low rates of non-performing loans.

Gunigundo said other economies like Hong Kong can afford to peg the exchange rates of their currencies, because they have a currency board for that.

Aside from this, he said, there must be certain controls, especially at the beginning of the transition process from a free market to pegged rate.