Lower-than-expected initial jobless claims in the US along with sustained rise of US Treasury rates weakened both the Philippine peso, which closed to its weakest since November 2006, and the local equities market Friday.
The local currency closed the week at P50, the weakest after the P50.12 on November 16, 2006, from the previous session’s P49.97. A trader said mid-month corporate demand for the US dollar was also another factor to the peso’s weakness. Also, BPI lead economist Emilio S. Neri Jr. said “importers appear to have a more significant-than-usual demand while the regular sellers were not as active in today’s trading session.”
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said external uncertainties continued to impact on the peso. ”And despite market uncertainty about a March US Fed interest rate hike, there was higher demand from corporates today,” he said.
The BSP official said monetary officials “continue to see negative market sentiment dominating the strong Philippine market fundamentals.”
He, however, stressed that “we should see market reacting to news that OFW (Overseas Filipino Workers) remittances remain resilient and growth prospects remain very positive at the back of strong consumption, investment and public expenditures.”
“In real terms, peso remains competitive and we continue to monitor pressure from weak exchange rate even as the exchange rate pass though to domestic inflation has gone down in recent years,” he said.
“There is no substitute to constant monitoring and surveillance for any possible risks in the horizon,” he added. The peso opened at P49.94, a dip from the P49.89 in the previous session. It traded between its closing and opening levels resulting to an average of P49.98. Volume of trade reached US$532 million, higher than the US$376.5 million a day ago. (PNA)
