The Philippine peso stayed at the 44 to a dollar level as it closed at 44.26 at the end of the week.
The local currency shed 9 centavos from 44.17 per dollar on Thursday’s close. The peso reached its weakest level since January 31, 2011 record of 44.27.
An analyst said the peso may further depreciate to at least 44.50 per dollar.
“Expect further tests toward the P44.50 levels, pullback if any is limited toward 43.70/43.85 levels,” the analyst said. The analyst also admitted that the peso depreciation was driven by reports that the US Federal Reserve will start tapering its bond purchase program.
Minutes of Fed’s July policy failed to provide clarity about the future of $85 billion a month stimulus program known as quantitative easing (QE). QE which has fuelled an investment splurge in emerging Asia over the past year.
Fed Chairman Ben Bernake recently assured the markets that the US will keep monetary policy easy in the future, following his statement that the central bank would likely slow its bond-buying program this year, which caused panic and sparked turmoil in global markets.
In an earlier statement, the Bangko Sentral ng Pilipinas (BSP) urged markets to be more discerning particularly in the decisions of policy makers particularly the US Fed.
“I hope markets will appreciate that in formulating policy, policy makers, such as the Fed and BSP, look at a myriad of variables that are moving and interacting with each other,” BSP Governor Amando Tetangco said.
He also assured the public that the BSP’s actions will continue to be guided by its primary mandate of price and financial stability.
Tetangco added that the central bank will consider the impact of the Fed guidance, market sentiment and actual flows of funds on global and domestic growth and inflation dynamics.
Mayvelin U. Caraballo