P41:$1 Seen In Next 12 Months

[Mr Lee]

What do you all think will happen if the peso hits 41, how is that going to impact our lives in the PHL, and even the lives of the locals?The complete story HERE and I sure hope they are wrong. The peso may appreciate to 41 against the dollar over the next 12 months as the Bangko Sentral ng Pilipinas will likely tolerate a stronger currency to better manage inflation and turn “hawkish” in its monetary policy, according to analysts from American investment banking giant Goldman Sachs.

[Art2ro]

I read it and still don't understand it! Just sounds gibberish to me! I don't know how anyone can predict the economy with their dull crystal ball! The U.S. didn't see the recession coming and they were the ones who created the whole fiasco of big government spending and borrowing money left and right from other countries especially the big economic power today, China!And now here overseas, the so called "expert analysts" are trying to predict our economic fate when they can't even predict the economic fate of the U.S.! Go figure!

[No name]

It will of course makes things more difficult.inflation has a tendency to weaken the value of the peso, not increase it so the bank moving to increase interest rates, if it does will be offset if there is inflation. Still 4.4% and 4.5% is not very high inflation.A major factor wasn't discussed in that article. You can't look at just one side of a currency to project exchange rate.The USA has been buying back its bonds, thus increasing its debt and putting more dollars into circulation. This is expected to be reversed by the end of 2011.However, the peso has risen about P1 over the last week. The last time I looked it was at P43.5 to 1. At the start of the month it was at P44.5 to one.When I first came to the Philippines the rate was at P39:1 to 1.I think the dollar will fall more before it goes back up. I hope it doesn't take long for it to get to P41 cause yeah, I think there is a good chance it could dip below 42. I think it is likely to dip below 42. It is already close to P41 so it wont make things that much worse.Okay, lets say you have $2000 a month. That means at 43.5 you have P87,000 a month.If it falls to P41.5 you'll have P83,000 a month.That is significant for me I consider P4000 to be a lot of money since I live here all the time and live on a pension. $100 for a working guy certainly isn't a major problem for us retired folks it is.For me it means fewer trips to Bantayan but I've already stopped going. I went a lot more when the exchange rate was P49.Inflation in the USA has been under 2% for the last two years because growth is so low. If the USA get high inflation and low growth, it isn't going to be good.Trouble in the Middle East could certainly cause that. How will the recent changes in Egypt play out? Democracy in that part of the world doesn't always go so well for us because so many there hate us.War with Iran? I think it will happen.I've learned not to take these currency predictions as expectations any more. I've seen them go both ways and seen them always wrong. This one though, with the peso already at 43.5, not far to go until P41.5 That could easily happen.Americans can hope the Euro takes another dive. :lol: That already saved us once.

[MikeB]

Weren't there experts predicting last summer that the peso would be at 40 or lower by end of year - 2010? Instead it went up. I subscribe to the monkey and dartboard method of predicting economic trends. If that fails, tea leaves. "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it." Ronald Reagan