Sunday, November 26, 2006

Forex News: Manila c. bank ups peso exchange rate forecast

Forex News

The Philippine central bank has upgraded its estimate for the value of the peso against the U.S. dollar next year to a range of 50 to 52 due to strong export growth, robust remittances and investment inflows.

The new assumption is more bullish than an earlier forecast range of 51 to 53 adopted by the government's economic committee, on which the central bank sits.

"Given the recent trend, the 50-52 range (to a U.S. dollar) is more realistic," Governor Amando Tetangco said at the sidelines of a conference over the weekend.

The peso hit a 4-½ year high of 44.66 against the dollar last week but later weakened to close at 49.71 on Friday, 6.4 percent up since the start of this year.

Record remittances from about 8.5 million Filipinos working overseas fuels domestic consumption and helps shield the Southeast Asian economy against external shocks.

Earlier this month, the central bank raised its estimate for total remittances in 2006 to a new peak of $13.4 billion, including about $12.3 billion sent through formal channels like banks, a 15 percent increase on last year's $10.7 billion.

Exports have been growing at a double-digit pace since the start of the year and the government expects overseas sales to beat its official export growth target of 10 percent this year.


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