MANILA, Philippines—The peso declined further on Thursday following a statement from the US Federal Reserve admitting that US economy could still face significant risks that could dampen growth.
The local currency closed at 43.77 against the US dollar, down by 24 centavos from the previous day’s finish of 43.53:$1.
Intraday high reached 43.61:$1, while intraday low settled hit 43.79:$1. Volume of trade amounted to $1.357 billion, up from $1.2 billion previously.
Traders said the statement fueled doubts on the ability of the Philippines and other emerging Asian countries to accelerate growth in exports after it has slowed down in recent months. The United States remains a major export market for goods made in the Philippines and other developing countries in Asia.
Traders also said the statement from the US Fed led to a dim outlook on the performance of the global economy. For this reason, they said, some investors tried to pull out portfolio investments, such as those from the Philippines, and simply held on to their dollars.
Acknowledging the risks confronting the US economy, the US Fed said it would keep the federal funds rate at historic low of zero to 25 basis points. It also said it would engage in buying and selling of treasuries in a manner that would help lower long-term interest rates. Both moves are meant to stimulate the lackluster growth of the US economy.