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The peso hit the 50:$1 level during morning trade Thursday.
At the Philippine Dealing System, the peso reached a low of 50:$1 and a high of 49.94:$1 after opening at 49.95:$1.
The peso yesterday closed at a fresh eight-year low of 49.86:$1, the weakest since Nov. 20, 2008’s 49.999:$1.
Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. yesterday attributed the weakness of the peso as well as other emerging market currencies to sustained strength of the US dollar, considered a safe haven by investors, amid global uncertainty.
“Basically, the weakness in emerging market currencies is due to dollar strength. And why is that so? Because of expectations that interest rates are going to rise in the US. And because as the [incoming Trump] administration pushes for increased spending and more rapid economic growth, that may result in higher inflation and therefore higher interest rates. Because of that, we are seeing the flow of capital out of emerging markets and back to the United States,” Tetangco told reporters.
“If you look at the movements of Asian regional currencies, the Philippine peso is basically in the middle of the range in terms of both the actual movement, meaning depreciation since the beginning of the year, as well as in terms of volatility of exchange rate movements. As I have mentioned, we are sticking to our current foreign exchange policy of allowing market forces to basically determine the exchange rate. But at the same time, we also do not want to see the exchange rate becoming out of line. And we don’t want to see too much volatility in exchange rate movements such that this can cause the disanchoring of the expectations,” Tetangco said. CBB