The currency closed at 48.50 to $1, down 17 centavos from Thursday’s 48.33 to $1. This is the lowest since the local currency closed at 48.62 last Sept. 4, 2009. STAR/File photo
MANILA, Philippines – The Philippine peso further weakened yesterday, closing at 48.50 to $1 amid market volatility caused by uncertainties in the global financial market.
The currency closed at 48.50 to $1, down 17 centavos from Thursday’s 48.33 to $1. This is the lowest since the local currency closed at 48.62 last Sept. 4, 2009.
It opened slightly lower at 48.40 to $1 as compared to 48.19 the previous day. Total volume reached $871.8 million, higher than Thursday’s $583.5 million.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. told reporters the weakening peso was driven mainly by external factors, including uncertainties arising from the possible interest hike to be implemented by the US Federal Reserve.
“At this point in time, there seems to be some risk aversion given again the uncertainty about when the US Fed is going to finally increase interest rates. Judging from the statements of various Fed governors and presidents, there seems to be some splits. Some want to increase and some would want to wait. So that causes some volatilities in financial markets,” Tetangco said.
He added that financial concerns in Europe were also raised due to the uncertainties in the stability of the Deutsche Bank.
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Domestic factors, such as the increase in corporate demands for dollars – needed for fixing and import requirements – also contributed to the weakening of the peso, Tetangco added.
“So together, these factors have pushed down exchange rate. But the increase in corporate demand is not negative because it indicates that you are growing and businesses are importing their requirements that they can use for further expansion,” he added.
Investor sentiment has also been shaken due to President Rodrigo Duterte’s tirades against US President Barack Obama, the European Union and United Nations Secretary-General Ban Ki-moon, after they meddled with the government’s all out war against drugs, which killed about 3,000 alleged drug users and pushers.
The BSP governor said the volatility in the market is expected to continue so long as there is no clear decision on the part of the Fed about its interest rates.
“You know you have anticipation, disappointments back to anticipation, back to disappointment. And this is global, not just here. So this has really caused market volatility. I think the volatility will likely continue until there is a clearer action or decision on the part of the Fed,” he said.