Peso closes at 50:$1
The peso yesterday closed at 50 to $1, ending the week at its weakest level since Nov. 15, 2006, when it hit 50.9 to $1, due to external uncertainties.
“It’s still the same story of external market uncertainty. And despite market uncertainty about a March US Fed interest rate hike, there was higher demand from corporations today. This drove the peso to touch 50- to-a-dollar level. We continue to see negative market sentiment dominating the strong Philippine market fundamentals,” Bangko Sentral ng Pilipinas Deputy Governor Diwa C. Guinigundo said in a text message to reporters.
“We should see the market reacting to news that overseas Filipino workers’ remittances remain resilient and growth prospects remain very positive at the back of strong consumption, investment and public expenditures,” Guinigundo said.
“In real terms, the peso remains competitive and we continue to monitor pressure from the weak exchange rate even as the exchange rate pass through to domestic inflation has gone down in recent years. There is no substitute to constant monitoring and surveillance for any possible risks in the horizon,” he added.
According to Bank of the Philippine Islands vice president and chief economist Emilio S. Neri Jr., “importers appear to have had a more significant-than-usual demand while the regular sellers were not as active in today’s trading session.”
“Inflation-wise, there is no cause for panic. We don’t see a significant pass through effect on CPI [consumer price index]. This is just a 0.56-percent year-to-date decline or a negative 4.26-percent decline per annum, still much slower than the 5.35-percent depreciation in 2016,” according to Neri.
At the Philippine Dealing System, the peso reached an intraday low of 50:$1 and a high of 49.94:$1.
It closed weaker even as it opened at 49.94:$1, stronger than Thursday’s close of 49.97:$1.
The total volume traded rose to $480 million from $376.5 million last Thursday.
In a report this week, Standard Chartered Bank said a recent survey showed that “Philippine clients exhibit the most bearishness” as far as foreign exchange is concerned.