DOF Sec Diokno Says They Will Prevent Peso From Hitting 60

As said by the Department of Finance Secretary, Benjamin Diokno, the government will actively prevent the peso from hitting ₱60 by releasing billions of dollars in the reserve.

In an interview after the Asia-Pacific Economic Cooperation finance ministers’ meeting, Secretary Diokno mentioned that the government is already looking to stop the exchange rate from “breaching 60”.

From now until the end of the year, the government is predicting $15.8 billion worth of inflows in remittances from Overseas Filipinos and call-center receipts. Secretary Diokno has said that $10 billion can be utilized to defend the peso.

“We are willing to spend some more just to defend it,”  says Diokno. “Let’s not worry about drawing down reserves, That’s the reason why we’re building up our buffers”

Secretary Diokno has said he pledged to the President that the weakening peso will gain strength at the end of the year when Filipinos would send money for the Christmas season from abroad and this would lower the exchange rate to 55 which he says is “where we want it to be.”

“That’s a very strong commitment from Diokno,” said Ms. Sophia Ng, a currency analyst at MUFG Bank Ltd. “We think it will still be tough to counter a strong US dollar. There is basically no change in the fundamental drivers of the peso, hence we think there is still a risk for it to breach 60 and head towards our year-end forecast at 61,” she adds.

Last September, the peso hit a record low of 59 against the US dollar.

Source: Business World