The peso weakened to a new 10-year low against the US dollar Tuesday, triggered by the strong demand for the greenback and uncertainties in the global financial markets.
The peso lost two centavos to close at 50.25 a dollar Tuesday from 50.23 a greenback on Monday. It was its weakest level in more than 10 years since it closed at 50.32 a dollar on Sept. 26, 2006. Volume traded reached $578.5 million Tuesday, lower than $723 million on Monday.
The peso opened Tuesday’s trading seven centavos weaker at 50.30. It touched 50.355 at one point before settling at 50.25 at the close.
“Our surveillance shows there is market demand to service legitimate dollar requirements and that’s moving the market. There is also market positioning as some participants have a view on the US dollar,” Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said in a text message.
“These are normally part of a healthy vibrant market. But this is not to say that we will stand back when we see that the movements are disruptive or excessive,” Tetangco said.
Bangko Sentral Deputy Governor Diwa Guinigundo said the peso continued to adjust to the uncertainty mostly in the global financial markets. “While global economic recovery is a work in progress, the fallout from the US Fed interest rate hike and the populist sentiment in Europe could dent market sentiment and with it bring down regional currencies including the peso. We have also some domestic concerns like the external payments deficit in January but again for me this is episodic,” Guinigundo said.
