Foreign exchange rate nears ₱53 to $1

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Metro Manila (CNN Philippines, June 11) — The Philippine peso closed weaker on Monday at ₱52.95 to $1.

This is a fresh 12-year low for the currency since July 19, 2006, when it closed at ₱52.74 versus the U.S. dollar. The peso settled at ₱52.70 to $1 on June 8.

According to traders, the weaker peso was driven by a rise in importation as the Philippines brought more goods from abroad paid in dollars, to support the administration's infrastructure spending program. This resulted in a wider trade deficit in April.

On the international front, traders point to fears over tariff wars between the U.S. and its trading partners Canada, Mexico and the European Union.

The Cabinet-level Development Budget Coordinating Committee, in its latest macroeconomic assumptions report dated April 13, said it expected the exchange rate to fall within the ₱50-₱53 to $1 range in 2018.

It added the economy would stabilize in 2019 after fluctuations in assumptions such as the exchange rate breaching the upper limit of ₱52 to $1 and inflation breaching the 2-4 percent target of the Bangko Sentral ng Pilipinas (BSP). Inflation in May reached a new five-year high of 4.6 percent.

The DBCC groups the Department of Budget and Management, Department of Finance, National Economic and Development Authority, Office of the President and BSP.