The Philippine peso weakened further against the greenback on Monday, posting a fresh near 11-year low, with strong US jobs data and the drop in the Bangko Sentral ng Pilipinas’ dollar reserves likely affecting investor sentiment.
The local currency lost 11 centavos in Monday’s trade and closed at P50.69:$1, from P50.58:$1 on Friday. It was the peso’s weakest finish since settling at P50.73:$1 on September 1, 2006. The peso opened at P50.59:$1 before trading between P50.58 and P50.69.
“Strong US data last Friday and the drop in BSP’s foreign exchange reserves are possible major reasons,” said Bank of the Philippine Islands lead economist Emilio Neri Jr.
On Friday, non-farm payrolls showed the US economy added 222,000 jobs in June.
The Philippines’ gross international reserves hit a three-month low of $81.41 billion in June amid dollar outflows from the central bank’s foreign exchange operations and debt payments, as well as gold revaluation adjustments.
Data released by the central bank showed gross reserves in June declined 0.92 percent, or about $764 million, from $82.17 billion in May. The June level marked the lowest since the GIR dropped to $80.89 billion in March.
The peso first touched the P50:$1 level on November 24 last year as bets on interest rate hikes in the US, which happened the following month, favored the dollar. The peso depreciated by 5.35 percent against the US dollar in 2016.