Peso slips to 5-week low

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Closes at P44.18 to $1, weakest since Aug 8

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The peso hit its weakest level in five weeks against the US dollar on Monday as investors anticipating further news about US interest rates fueled demand for the greenback.

The local currency opened at 44.12 and touched 44.19 against the dollar before closing at P44.18. Monday’s rate marks the peso’s weakest level since August 8, when the peso traded at P44.13.

The peso has now lost 27 centavos from the P43.91 close on September 12.

Volume transacted on the Philippine Dealing System fell to $728 million from $1.036 billion traded on Friday last week.

The central bank said the peso’s decline overnight was somewhat in the middle of the range of regional currency moves.

“The way we see it, today’s move in the regional currencies basically reflects market expectations of more hawkish statements from the Fed,” said Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr.

Tetangco was referring to the United States Federal Reserve’s sixth two-day policy meeting this year, which is scheduled for September 16 to 17.

Meanwhile, the BSP governor reiterated that the BSP’s foreign exchange policy remains the same—that is, allowing market forces to essentially determine the value of the peso and not going against the fundamental trend, but keeping room for official action to guard against excessive volatility.

“We have the tools to address potential further excesses,” he added.

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