Peso falls on reports of Greek referendum on debt package

AFP PHOTO/ROMEO GACAD

MANILA, Philippines—The peso fell on Wednesday as financial markets worldwide remained concerned over the announcement by the Greek Prime Minister that the crisis-management measure for Greece would be subjected to a referendum.

A referendum makes the measure, which was supposed to have calmed markets, uncertain.

The local currency closed at 42.76 against the US dollar on Wednesday, down by 14 centavos from Friday’s finish of 42.62:$1.

The market was closed on Monday and Tuesday, which were declared national holidays to allow people to remember and visit their dead family members.

Intraday high hit 42.75:$1, while intraday low settled at 43.05:$1. Volume of trade amounted to $925.66 million from $864.80 million previously.

Traders said financial markets initially welcomed the announcement by European leaders on a set of measures to address the eurozone debt crisis, led by the burgeoning debt of Greece and a few other member-states.

The measures include a 50-percent cut in the yield to be received by holders of Greek bonds, among other revenue-saving measures. The International Monetary Fund and the European Central Bank are also expected to help out by injecting liquidity. The latter will do so by buying more bonds in the financial markets.

However, traders said the announcement by Greek Prime Minister George Papandreou that the reform package concerning Greece would have to undergo a referendum again caused jitters to markets.

A prolonged crisis in the eurozone is feared to dampen growth prospects for the global economy, including emerging markets that are currently performing relatively well.