The recent weakening of Asian currencies, including the Philippine peso, against the US dollar can be traced to positive developments in advanced economies, especially the United States, the central bank said on Tuesday.
“The currencies in Asia, including the peso, are being affected by the advanced economies, particularly the US,” Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. told reporters at the Philippine Economic Briefing on Tuesday.
Data affirming a recovery trend in US and global economies has given the market reason to speculate that the US Federal Reserve is likely to start raising interest rates earlier than expected, he said.
Last week, the latest estimates showed that the US economy as measured by gross domestic product (GDP), grew at an annual rate of 4.6 percent in the second quarter of year—a sharp improvement from the first-quarter contraction of 2.1 percent.
“Now, this is not only true for the Philippines. Other currencies in the region have also shown the same weakening trend,” Tetangco said.
The BSP governor noted that this year as of September 29, the peso has lost about 1.33 percent of its value; the yuan has depreciated by 1.22 percent and the Singapore dollar by 0.65 percent.
“Other currencies have shown some appreciation, but if you look at the movements of the different currencies over the last three years, you will see that there have been appreciations and depreciations. So overall, we can say that we have moved more or less together with the currencies in the region,” he said.
Volatility-wise, the peso eased 1.32 percent, compared with the baht’s 0.94 percent; the Indian rupee by 2.2 percent; the Malaysian ringgit 1.56 percent and the Singapore dollar 0.83 percent.
“In terms of volatility, the peso again is in the middle of the range of volatilities of the Asian currencies,” Tetangco said.
At the Philippine Dealing System, the peso showed a slight rebound on Tuesday after hitting its weakest level in six months the previous day.
The local currency opened at P45 to $1 before trading between P44.78 and P45.04. It closed at P44.87.
Volume transacted on the PDS rose to $849.500 million, compared with $624.6 million traded Monday. The peso recovered by 12 centavos from the P44.996 close on Monday.
Monday’s rate marks the local currency’s weakest level since March 27, when the peso traded at P45.04 per dollar.