Fitch Solutions, a unit of Fitch Group, has revised downward its peso-dollar exchange rate forecast to an average of 49.20 from 48.10 this year, given low vaccination rates and difficulties containing COVID-19 outbreaks in the country.
In a report Tuesday, Fitch Solutions said the peso will trade in a wide range over the near term—between 49 and 52 per US dollar—given the uncertainty around the country’s handling of the pandemic, the Bangko Sentral ng Pilipinas’ loose monetary policy stance and weakening fundamentals.
“Since our last update (June 17), the peso has depreciated 3.1 percent against the greenback, bringing the year-to-date return to 3.8 percent. Asian currencies have remained under pressure in Q321 due to the region’s slow pace of vaccinations, Delta variant outbreaks and renewed restrictions, signs of slower growth in China and limited hawkish guidance by central banks,” it said.