The peso depreciated on Monday to an 18-month low against the US dollar, pulled down by the attractiveness of the greenback following US Fed’s earlier signal of tapering bond purchases.
The peso lost 35 centavos to settle at 51, weaker than its closing of 50.65 a greenback on Friday. It was the local currency’s weakest level in 18 months, since it hit 51 per dollar at the close on March 27, 2020. Total volume traded reached $1.261 billion on Monday, up from $1.185 billion in the previous currency trading.
Michael Ricafort, chief economist of Rizal Commercial Banking Corp., earlier said in a report that aside from the Fed’s hint of tapering bond/asset purchases, other reasons for the peso’s weakness were the concerns over the Evergrande mess in China that caused some global safe haven flows to the US currency, and the Bangko Sentral ng Pilipinas’ downward revision of the balance of payments surplus projection for 2021.
“The US dollar/peso exchange rate went up over the past 3.5 months since posting 47.61 on June 1, 2021 in anticipation for the seasonal increase in importation activities in the third quarter,” Ricafort said.