Peso hits new low at P45.41:$1


The Philippine peso entered a new low at the start of the trading week as it closed at P45.41 to a dollar on Monday.

The local currency recorded its lowest level since August 24, 2010, when it closed P45.53 to a dollar. It shed 9 centavos from the P45.32 to a dollar level on January 30.

Analysts attributed the peso and other regional currency depreciation to weak manufacturing data from China. China’s official Purchasing Managers’ Index slowed down to 50.5 in January from December’s 51.

A market strategist, on the other hand, said that the peso was affected by risk aversion following the stock market decline in emerging markets.

Earlier, an international think tank said that it sees the peso to hitting P46 to a dollar as pressures from portfolio rebalancing continues, adding that the peso depreciation was seen as a region-wide response to continuing speculation about the likely strength of the United States economic recovery, and its impact on the speed of the Federal Reserve tapering on its bond-buying program.

For its part, the Bangko Sentral ng Pilipinas (BSP) said that is ready for market intervention in case of excessive peso volatility.

BSP Governor Amando Tetangco Jr. said that the volatility of the Philippine peso remains within the range of volatilities of currencies in the Asian region.

He noted that exchange rate determination to the market is one of the objectives of the monetary authority to address volatility.

“But we would be prepared to participate in foreign exchange trading if there’s excessive volatility, so we want to minimize the volatility. But the fundamental foreign exchange policy remains,” he said.

Tetangco added that the BSP is also monitoring these volatilities, and ensuring that there are tools available both in terms of monetary policy tools as well as macroprudential measures.

“The tools are there and if there’s a need to deploy any combination, and if the situation requires it, then we’re good,” he said.


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