Diokno assures stable peso to US dollar despite pandemic
Central bank Governor Benjamin Diokno assured on Wednesday that the value of the peso to the US dollar would be stable despite the coronavirus pandemic.
In the "Laging Handa" televised press briefing, Diokno said while the current crisis is "unprecedented," the Philippine economy is in a better position "to the extent that we have lots of dollar (reserves) now."
"We have close to 100 billion US dollars of what we call as gross international reserves. So, there's no threat that we cannot pay our debts, we're running out of dollars," he said.
Currently, he noted that the exchange rate is around 48.50 to the greenback.
"We can assure our fellowmen that perhaps the value of the peso will be steady at such rate. May be it will range between 48.50 to 48.70," Diokno said.
He noted that the Philippine peso is the "second strongest currency in the world and number one in Asia."
Diokno recalled that during the regime of late dictator Ferdinand Marcos, the Asian financial and global financial crises, the local currency suffered.
"Every time we experienced a crisis, we ran out of dollar to pay our debts. First, we devalued, the peso depreciated. For example, from 20, it became 34, then 45...now, in order not to depreciate our currency, we increase our interest rate," he explained.
But currently, Diokno said the Monetary Board had cut the policy rate by 175 basis points or 1.75 percent compared when there was a crisis when it was 2.25 percent.
Aside from cutting the policy rate to cushion the impact of COVID-19 pandemic, the Bangko Sentral ng Pilipinas also slashed the reserve requirements of the banks to ensure liquidity.
So far, Diokno said with the measures, P1.5 trillion has been already released to financial system to increase liquidity.
"That is equivalent to 7.6 percent of our gross domestic product," he said. Celerina Monte/DMS