Peso closes at fresh near 13-year low, now 3rd weakest among fastest-growing Asian countries

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(File photo)

Metro Manila (CNN Philippines, September 11) — The value of Philippine peso against the U.S. dollar is now the third weakest among the 12 fastest-growing economies in Asia, according to the Department of Finance (DOF).

This, after it closed today at a fresh near thirteen-year low of ₱53.94 from Monday's ₱53.88, inching closer to the ₱53.98 mark on December 7, 2005.

In an economic bulletin, the DOF said the peso depreciated by 7.39 percent year-to-date despite the country having one of the highest gross domestic product growth rate in the region.

The peso trailed India's rupee and Indonesia's rupiah that depreciated by 11.7 percent and 9 percent, respectively.

Chinese yuan (4.97%), Korean won (4.46%), and Taiwan dollar (3.46%) followed.

According to the DOF, the depreciation is due to "severe exchange rate volatility" as a result of the global trade war, "the Turkey-Argentina crisis, and the Federal Reserve Board monetary normalization."

"Since July 31 when emerging markets were the target of adverse hot money movements as contagion spread from problems in Turkey and Argentina, the Philippine peso depreciated by 0.82 percent, ranking fifth among eight Asian countries whose currencies depreciated," DOF Undersecretary and Chief Economist Gil Beltran were quoted as saying.

However, Beltran noted that the "coefficient of variation shows that the volatility level of the Philippine peso, at 1.91 percent year-to-date, reflects the average for all 12 Asian countries. Volatility ranges from 0.14 percent for Hongkong to 3.13 percent of China."

Despite the depreciation, Beltran said "maintaining good macro-economic policies, thru manageable fiscal and BOP balances, and adopting economic reforms [through] tax reforms [are] still the best way to sustain growth and investment and, at the same time, steel the economy from external economic shocks."