Peso falls to P41-to-dollar level

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09:36 PM December 12th, 2012

By: Michelle V. Remo, December 12th, 2012 09:36 PM

MANILA, Philippines—The peso fell back to the 41-to-dollar territory on Wednesday as the market decided to wait for the results of the policy-setting meeting of the Bankgo Sentral ng Pilipinas on Thursday.

The local currency closed at 41.02 against the US dollar, down by 6.5 centavos from the previous day’s finish of 40.955:$1.

Intraday high hit 40.9:$1, while intraday low settled at 41.04:$1.

Volume of trade amounted to $810.6 million from $493 million previously.

“The movement of the peso was more because the market was on a wait-and-see stance. The market was defensive as they await moves from the BSP,” said Jonathan Ravelas, market strategist for Banco de Oro.

The BSP’s Monetary Board is set to hold a policy-setting meeting on Thursday. Expectations are that the BSP will keep interest rates steady, but the market is unsure whether the monetary authority will implement “macro-prudential measures” (bank regulations) that may affect the entry of excessive and speculative types of foreign portfolio investments.

Ravelas said the drop of the peso might have been partly influenced by concerns over North Korea’s rocket launch, a move that defied international warnings against it.

He said geopolitical tensions created by the development in North Korea led some investors to make their investments safe by shifting to the dollar.

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