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Peso seen within target range this year

The peso’s depreciation against the dollar is no cause for alarm, as its average rate is expected to remain within target range for the year of up to 52 to 53 to the dollar, according to a ranking National Economic and Development Authority (NEDA) official.

“We are looking at the year-to-date (average rate of) 52 something. DBCC’s (Development Budget Coordination Committee) target range is up to 52 to 53. So we think for the year, it will just be around that range. I don’t think this will be breached,” said NEDA Undersecretary Rosemarie Edillon in an interview last week.

The peso closed at 53.43 to the US dollar on Monday from previous close of 53.34.

Analysts of First Metro Investment Corporation (FMIC) and the University of Asia & the Pacific (UA&P) have noted that a 10-percent depreciation adds only around 0.5 percent to inflation.

The resulting additional inflation would only be 0.3 percent if the foreign exchange rate averages 6 percent higher, they said.

Edillon said the government is undertaking measures to curb inflation.

“If the cheap rice already comes in, that should bring down inflation. And you have more vigilant monitoring of the fresh produce (because) before, only monitored were the manufactured goods,” she added.