The peso further weakened against the US dollar Wednesday, amid the lingering uncertainties following the US presidential election and the looming Federal Reserve rate hike in December.
The peso lost P0.18 to close at 49.35 a dollar Wednesday, the weakest level in almost eight years since settling at 49.37 against the greenback on Dec. 4, 2008 during the global financial crisis.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said the peso’s continuous decline was due mainly to the dollar strength, as other regional currencies also showed weakness.
“Because the expectation of the market is the policies that are going to be adopted by the US government will likely lead to higher interest rates particularly Treasury rates, and as a result of that, capital flows are being moved towards the US. That is regional and emerging market-wide,” Tetangco said.
Economists from First Metro Investment Corp. and University of Asia & the Pacific said the “US/PHP rate will remain under pressure as the Fed raises its policy rate in December, and as the local stock market may go sideways until the end of the year.”