Economy - - Nov 30,2016
Peso, the currency of Philippines plunged at a fresh 8 year low and it’s traded above P50 to the US dollar.
Thursday, the currency of the Southeast Asian country, Philippines, touched 50 to the US dollar for the first time in eight years. It is recorded as the biggest annual loss since the year 2013. According to the Philippines Dealing System (PDS) on Friday morning, Peso opened at P49.99 from Thursday’s close of P49.98. The Philippines currency lost P0.12 =after a close of P49.86 a dollar on Wednesday.
A similar situation happened when Peso was traded at 49.99 a dollar on 20 November 2008 during the height of the global financial crisis. The government officials and economists think that the weakening of the Philippine currency is not alarming, as other currencies are also depreciating across developing markets like Malaysia and Indonesia.
Finance Secretary Carlos G. Dominguez III, who also heads the Duterte administration’s economic team said in an announcement, “The Philippine peso’s breaching of the 50:$1 level is an expected reaction of the local currency to the anticipated early rate increase by the US Federal Reserve, with other Asian currencies also moving in the same direction.” Dominguez further added, they are observing the currency movements very carefully which seems to be moving in the same direction as the other currencies. The motive is mainly to avoid unexpected changes in the exchange rates.
Some traders said that, they expected the central bank to intervene in this matter so as to help boost the value of Peso from such low levels.
The governor of Bangko Sentral ng Pilipinas (BSP), Mr. Amando Tetangco Jr. said, the instability in financial markets is worldwide and the weakness in emerging market currencies was due to dollar’s power.