The Philippine peso has been moving in tandem with the movements of most currencies in Asia. With the continuing risk aversion in the external markets, the peso has weakened by 1.6 percent on a year-to-date basis as of 29 June 2009 but performing better than some Asian currencies. Other currencies in the region have also depreciated against the dollar this year such as the Singapore dollar (1.8%), Malaysian ringgit (1.9%), South Korean won (2.0%), and Japanese yen (5.1%). Meanwhile, the Indonesian rupiah, the Thai baht and the Indian rupee have strengthened from their levels at the start of the year. The peso’s current value as well as its average value year-to-date remain within the DBCC’s assumed range of P46-49 per US dollar for the year 2009.
The BSP will continue to monitor closely the evolving developments in monetary and foreign exchange conditions to enable it to take appropriate measures consistent with its primary mandate of promoting price stability under the inflation targeting framework. Under this framework, the BSP allows the peso’s value to be determined by market forces, with the BSP’s participation limited to ensuring orderly conditions in the foreign exchange market.