'Nothing particularly unusual' about peso depreciation – BSP

The peso traded as soft as P50.780:$1 early Tuesday, but there's "nothing particularly unusual" about such depreciation of the peso breaching an 11-year low, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.

"It's actually just reflecting market conditions and underlying fundamentals. We've seen nothing particularly unusual about this, it's the nature of the exchange rate to fluctuate," BSP Governor Nestor A. Espenilla, Jr. told reporters on the sidelines of the 2017 Awards Ceremony and Appreciation Lunch for BSP Stakeholders.

The peso on Monday closed at P50.695:$1, the weakest since it closed at P50.735:$1 on September 1, 2006.

"As far as the BSP is concerned, we're there, we're managing excessive volatility," Espenilla said.

"The approach of the BSP is to let the exchange rate reflect underlying market conditions," he added.

Espenilla said current conditions remain healthy.

"What we look at isn't much the exchange rate but the underlying conditions. Today, the underlying conditions are quite healthy. As a result, prices reflect those conditions," he said.

"Our focus is keeping inflation low and the banking system strong. These are still existing today," he added.

Among the factors Espenilla cited for the weakening of the peso are policy uncertainties, and geopolitical tensions.

"There are many factors that affect this. Right now, there are a lot of external factors that affect the currency. We've said volatility is there because of policy uncertainties, geopolitical tensions. So it's very difficult to say what's affecting it on a daily basis," he said. — VDS, GMA News