“We [BSP] have maintained that external competitiveness is more than the exchange rate. It is principally increasing productivity and reducing cost,†Tetangco said in a Tuesday text mesage.
The BSP does not target a particular exchange rate but instead maintains a presence when the volatility is excessive, Tetangco said.
A much earlier report from last October 8 said the BSP had stressed that it would not increase its dollar-buying activities just so the peso would become artificially weak.
While a strong peso hurts exporters, it benefits importers. This is because a strong peso makes imported goods cheaper in local currency terms.
And because it helps make imports, such as oil, cheaper, a strong peso likewise helps temper overall inflation in the country.
The peso, which lingers in the 41-to-a-dollar level, has strengthened against the US dollar by about 6 percent since the start of the year. — DVM, GMA News
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