RP economy expected to benefit from yuan rise
CHINA’S move to allow the yuan to appreciate could benefit the Philippines, the central bank and analysts said on Sunday.
Removal of the dollar peg would, in particular, make Philippine exports more attractive, some analysts said, although others pointed out that any gains — trade or otherwise — required a significant appreciation of the currency.
Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr. said in a text message to reporters that the move by [Chinese] authorities to improve the exchange rate mechanism and increase the regime’s flexibility reflects an assessment from authorities that the recovery in Chinese economy is on a more solid footing.
The People’s Bank of China (PBOC) last Saturday announced that it would “increase the … exchange rate flexibility” of the yuan, effectively signaling a departure from the 23-month-old dollar peg which the government installed at the height of the 2008 financial crisis.
The announcement came shortly before a G20 summit in Canada this weekend, where China was expected to receive flak for keeping the yuan weak to fortify its external trade advantage.
(PIA-Bohol)
