Peso is 3rd best-performing currency globally
MANILA, Philippines - The peso remains one of the world’s best performing currencies, debt watcher Standard & Poor’s Ratings Services (S&P) said Friday.
The local currency ranked third globally, appreciating 25 percent in real terms from March 2007 to March 2013, according to the S&P report.
Only the Chinese renminbi and Singapore dollar outperformed the peso. The two currencies have strengthened 29 percent and 26 percent, respectively, from their levels six years ago.
The performance was calculated using the real effective exchange rate (REER), which measures the inflation-adjusted value of currencies versus a basket of other units from trading partners.
“No single member of the 27-member European Union and only one of the 34-member Organization for Economic Cooperation and Development is among the top 10 most appreciated currencies,” S&P noted.
Behind the peso, the Australian dollar ranked fourth, rising 23 percent from its 2007 level. It was followed by the Brazilian real, Colombian peso and Peruvian nuevo sol, which rose 22 percent, 21 percent and 19 percent, respectively.
Rounding up the list was the Russian rubble, which firmed up 18 percent, and Saudi riyal and Venezuelan bolivar, which both appreciated 15 percent, the report stated.
According to the Bangko Sentral ng Pilipinas (BSP), the peso has strengthened 6.8 percent versus the greenback last year. It closed at 41.22 to a dollar last Friday, up four centavos from the previous day.
In real terms, the peso increased its value by 6.5 percent versus currencies of trading partners, according to the BSP. “The peso lost external competitiveness in 2012,” it said.
Concerns have been raised against the continued appreciation of the peso, especially on how it trims the value of dollar export earnings and remittances from overseas Filipinos.
The BSP, for its part, has implemented various macro-prudential measures to temper capital inflows causing the peso’s strong performance.
Among others, foreign funds were banned in parking at special deposit accounts (SDA) last July. Interest paid on SDA - money of banks and trust departments with the BSP - were also slashed by 150 basis points this year.
Foreign exchange rules were also further liberalized this month to encourage more outflows and balance the inflows to prevent pressure for the peso to rise.
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