Peso closes at another low of 50.25:$1

AFP FILE PHOTO

MANILA — The peso on Tuesday shed two more centavos to stay at an over a decade low, even as the Bangko Sentral ng Pilipinas expressed confidence that the country’s solid macro fundamentals would shield not only the domestic currency but also the entire economy against external volatilities.

The peso closed at 50.25:$1 from 50.23:$1 last Monday, still the weakest since Sept. 26, 2006’s 50.32:$1.

The domestic currency hit an intraday low of 50.355:$1 and a high of 50.25:$1 after opening at 50.3:$1.

The total volume traded dropped to $578 million from Monday’s $723 million.

“Our surveillance shows there is market demand to service legitimate dollar requirements and that’s moving the market. There is also market positioning as some participants have a view on the US dollar,” BSP Governor Amando M. Tetangco Jr. said in a text message to reporters.

“These are normally part of a healthy vibrant market. But this is not to say that we will stand back when we see that the movements are disruptive or excessive,” Tetangco added.

BSP Deputy Governor Diwa C. Guinigundo noted that the peso “continues to adjust to the uncertainty mostly in the global financial markets.”

“While global economic recovery is a work in progress, the fallout from the US Fed interest rate hike and the populist sentiment in Europe could dent market sentiment and with it bring down regional currencies including the peso,” Guinigundo said.

“We have also some domestic concerns like the external payments deficit in January, but again, for me, this is episodic. It’s one of 12 data points for 2017 in which we expect some rebound from the small deficit in 2016,” Guinigundo added.

“Looking ahead, we continue to see the resiliency of the economy even as imports for infrastructure and power resurge. Public spending in all likelihood supported by higher revenues and the proposed tax reform will buttress domestic demand and keep the growth momentum. The peso-dollar rate is no different. Under an independent float, the peso will reflect market volatilities but at the end of the day will be supported by our robust macrofundamentals. The BSP will keep its eye on the ball and its feet on the ground,” according to Guinigundo.  SFM