Propped up for now by weak imports amid a domestic economic recession, the peso is seen to resume its depreciation bias against the US dollar in the coming months and return to the 50:$1 levels by next year.
In a research note dated Sept. 1, New York-based think tank Global Source sees the local currency closing at 49.50:$1 this year and gradually depreciating to 50:84:$1 at the end of next year.
“With imports expected to recover, although only gradually given our poor domestic demand outlook, we think the peso will reverse course but settle just below P50:$1 by end-year and continuing to depreciate in 2021,” Global Source said in a research note written by Filipino economists Romeo Bernardo and Marie Christine Tang.
As of Friday, the peso ended at 48.62 against the dollar, sharply appreciating from a low of 52:$1 just before the Philippines locked down Metro Manila and other key regions to curb the coronavirus (COVID-19) pandemic.
While observers generally agree that monetary policy can only do so much, they are nevertheless pressing the BSP to do one more thing—keep the peso from further strengthening, Global Source said. INQ