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Peso-dollar exchange rate to settle at P42-43, says HSBC

April 30, 2008


Stocks, Mutual Funds, Forex, Finance Philippines
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The rapid rally of the Philippine Peso last year which made it the best performing currency in Asia will not be seen this year, according to multinational bank HSBC.

Later this year, the Peso is expected to depreciate further to P43 : $1 before settling at P42 by year-end. HSBC said that rising inflation in the country is a major factor why currency buyers might opt not to select the Peso this year. They are yet to see whether the monetary policy response of the Bangko Sentral ng Pilipinas is appropriate.

HSBC economist Frederic Neumann explained that the Singapore dollar was still rising against the US dollar because its central bank had tightened interest rates aggressively. The Malaysian rupiah is also being bought, despite their central bank having a not so strong monetary response, because its inflation is kept intact because of subsidies.

The P42-43 exchange rate is a far cry from exchange rate predictions of analysts early this year. During the first week of January, we published a collection of predictions on the peso-dollar exchange rate.

“Peso can further appreciate to P37.50 in 2008″
- a report by CitiGroup

“As much as P38.00 by early 2008″
- Michael G. Manuel, CEO of Sun Life of Canada (Philippines)

Hitting P38.00 is already almost a certainty”
- Ramon Lim, treasurer of Philippine National Bank

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“We’re looking at P37.00
- Roland Avante, Chinatrust Commercial Bank treasurer

“Peso likely to zoom to P35.00-37.00 against the greenback”
- Antonio Agcaoili Jr., Asia United Bank senior vice president

“Peso might break into the P39.00 level but only briefly this year”
- Jose Emmanuel Hilado, chief foreign exchange dealer at Banco de Oro-EPCI

“Peso will rise to P37.00 this year and further to P30.00 next year.”
- BNP Paribas

“Peso at P40.00
- American Express Bank

P41.00 is to $1 over the next 12 months”
- Bear Stearns

Only two of the 9 predictions hit the mark. That only proves how unpredictable the market is because even the best financial markets analysts can miss.


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Join the discussion! Post a comment below


  • http://techathand.net Dexter

    I will go for the higher one.. i am an OFW..

  • Dina

    OFW din ako at mas gusto ko rin mas mataas nang konti ang conversion ng dollar sa peso. Nung tumaas ang peso, nalugi ako kasi konti na lang ang nakukuha ng pamilya ko sa Pilipinas.

  • art macayan

    the government should plot an appropriate exchange rate between peso and dollar so that it would be beneficial to both;the OFW as well as to domestic workers.

  • http://just-robert.com Robert Mancelita, Jr.

    Whatever happens, peso-dollar may increase or not, I’ll still be happy. Because I make money online, with US Dollars. It’ll be more good if the exchange rate may increase. but I’ll still be happy if it decreases. No problem with me in short.

    Regards,
    Robert
    http://www.Just-Robert.com

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