By Joann Santiago
MANILA, Aug. 26 (PNA) — The Philippine peso again depreciated to the greenback Wednesday following the Chinese central bank’s decision to cut its main interest rate and banks’ reserve requirement Tuesday.
It shed P0.11 to 46.72 from day-ago’s 46.61, which a trader said remains in line with other currencies in the region.
The trader said downward revision of the Philippines’ first quarter 2015 growth to five percent from 5.2 percent previously also put a dent on the local currency.
The peso opened the day at 46.73 and traded between 46.74 and 46.57.
This brought the day’s average to 46.65.
Volume of trade reached USD 901.1 million from the previous trading day’s USD 765.2 million.
ING Bank Manila senior economist Joey Cuyegkeng, in a research note, raised the possibility of revising anew their peso to dollar assumption for 2015 to the weaker side.
The bank recently revised its year-end peso assumption to 46.50 from 45.50 previously.
“PHP and Asian currencies are still looking for the bottom of this weakening move. Without major global central banks’ actions to address the main sources of emerging markets (EM) risk aversion and prevent further currency contagion and intensify EM debt and economic growth risks, Asian currencies and PHP would likely remain on the defensive,” Cuyegkeng said.
The economist cited that “in our view, Philippine economic fundamentals remain favorable and that the recent weakness is externally driven.”
“But further weakness of Asian currencies is likely to keep PHP also biased towards weakness even as PHP may outperform other Asian currencies,” he added.(PNA)