The peso still emerged as the least volatile currency in the region despite shedding four percent last month due to uncertainties brought about by the impending increase in US interest rates.
MANILA, Philippines – The peso still emerged as the least volatile currency in the region despite shedding four percent last month due to uncertainties brought about by the impending increase in US interest rates.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the year-to-date volatility of the peso stood at 1.21 percent better than the Thai baht’s 1.3 percent, Indonesian rupiah’s 1.94 percent, Taiwanese dollar’s 2.01 percent, Singaporean dollar’s 2.1 percent, and the Malaysian ringgit’s 3.03 percent.
The volatility of the Chinese yuan stood at 1.11 percent.
The volatility of the euro stood at 1.48 percent, while that of the British pound or sterling averaged 4.45 percent after the United Kingdom decided to leave the European Union (Brexit) through a referendum held last June 23.
The Indian rupee emerged as the least volatile currency with a rate of 0.86 percent, while Brazil’s real was the most volatile at 8.26 percent.
The Swiss franc had a volatility rate of 1.56 percent followed by the Turkish lira with 2.05 percent, the Australian dollar with 3.05 percent, the Mexican peso with 3.33 percent, and the New Zealand dollar with 3.82 percent.
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BSP Governor Amando Tetangco Jr. told members of the Rotary Club of Makati West during a lunch meeting that the local currency has been under some pressure lately.
“Pundits attribute this to current events that hog the media. Without doubt, the foreign exchange market is driven by sentiment. But negative sentiment toward the regional currencies, including the peso, has really also been largely affected by the market views on the actions of the advance economies’ central banks, especially the Fed, so externally induced,” he said.
The US Federal Reserve decided to keep interest rates unchanged last month but signaled it could raise policy rates before the end of the year.
“It is difficult to precisely dissect how much of the FX movements is due to the global environment and how much is idiosyncratic. Nevertheless, the BSP policy on the exchange rate remains the same,” he added.
The peso gained 32 centavos to close at 48.18 to $1 yesterday from Friday’s 48.50. It opened stronger at 48.38 to $1 and closed at an intra-day high of 48.18 to $1. Volume amounted to $337.9 million from Friday’s $871.8 million.
Likewise, the tirades made by President Duterte against US President Barack Obama, UN Secretary General Ban Ki-moon, and the European Union for allegedly meddling in the government’s all-out war against illegal drugs have unnerved investors.