Peso weakens to fresh trough
THE PESO continued to slump versus the greenback on Thursday to hit another trough due to a stronger dollar overall and on the back of foreign selling in the local bourse, which strengthened appetite for the greenback.
The local currency closed at P50.67 against the greenback, sliding seven centavos from its P50.60- per- dollar finish on Wednesday.
Yesterday’s finish was the peso’s weakest level in more than a decade or since it ended at P50.735 per dollar on Sept. 1, 2006.
The peso opened the session at its best showing for the day at P50.53 versus the foreign currency, while its intraday low was seen at P50.695-to-a-dollar.
Dollars traded amounted to $ 429.9 million yesterday, down from $507 million seen the previous day.
Shortly after the session opened, Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. told reporters in a text message that the central bank continues to monitor sharp swings from the peso’s movement versus the dollar.
“The latest peso movements broadly reflect prevailing market conditions and underlying economic fundamentals, in line with BSP exchange rate policy. BSP is nevertheless actively managing excessive volatility. This is business as usual,” he said.
As regulator to the Philippine financial system, the central bank sometimes intervenes in the daily foreign exchange market in order to temper any sharp peso swings and maintain its stability.
Mr. Espenilla also noted external factors primarily contributed to a stronger dollar, particular major central banks’ recent pronouncements. “A major driver is sentiment for a stronger USD as the Fed[eral Reserve] moves forward with steps to normalize from ultra- easy monetary policy as US economic conditions steadily improve. There is also growing policy convergence with Europe and even Japan,” he said. —