The Philippine peso further improved as it closed P43.43 to a dollar on Wednesday.
The local currency appreciated 23 centavos from the P43.66 close on Tuesday.
Reacting to the P43 to a dollar level of the peso, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said that the local currency is at the middle of the rate of depreciation.
“If you look at the region, the peso remains at the middle of the pack in terms of depreciation this year,” Tetangco said on the sidelines of the Second Philippine Financial Market Forum held in Makati City.
He added that the local market is also at the middle of the range of volatility, as the regional currencies are more or less moving together.
“If you look at the movements last year, the peso was in the middle in terms of appreciation but toward the higher end,” he stated.
Moreover, the BSP governor said that the exchange rate will continue to be market-determined, and the central bank will maintain its strategic market presence to avoid excesses in volatilities and to provide appropriate market guidance.
“As I said, we will continue with the forex policy we have now and as well as the monetary policy approach that we are following,” he added.
Tetangco further said that the BSP also monitors developments and see if there is any need to refine existing measures.
“We are not deviating from the overall thrust of policy but if there’s a need for it, we will review and introduce certain refinements on existing measures,” he added.
The BSP governor said that monetary policy will continue to be conducted in consideration of the inflation outlook and mindful of any financial stability pressures.
Tetangco added that the central bank’s inflation outlook remains steady and still closer to the lower end of its 3-percent to 5-percent target, despite the recent exchange rate movements.
“We are confident that we will be able to meet our inflation targets this year and next year,” he said.
He also noted that the pass through of exchange rate movements is marginal, that the central bank do not see any significant impact on consumer prices coming from depreciation.
“By how much inflation will respond to forex. It is very marginal,” he added.