MANILA, Philippines — The Philippine peso sank to its lowest level in a decade as it continues to be weighed down by expectations of a rate increase by the US Federal Reserve and a cloud of political uncertainty surrounding the administration of President Rodrigo Duterte.
The peso closed at P50.400 to $1, lower than Thursday’s close at P50.310, according to the Philippine Dealing System.
Its closing level was the lowest during the day while its intraday high was at P50.315.
The Philippine peso remains the weakest among several Asian currencies which have strengthened against the greenback this year.
Analysts say that gyrations in the exchange rate are due to the expectation that the Federal Reserve would raise interest rates.
According to the median estimate in Bloomberg surveys of analysts, the peso could depreciate to P50.60. Bloomberg said that the Bank of Philippine Islands estimated that the peso could slide to P52.50 this year.
Aside from expectations over the interest rate in the US, political uncertainties are also pulling down the value of the peso.
You have a whole bunch of political developments recently that when you put it all together, people outside will probably say ‘wait, let’s be cautious here’,” Joey Cuyegkeng, senior economist at ING, was quoted by Bloomberg as saying.
He added that once the political scene has stabilized, some recovery in sentiment would happen. However, this would take a while, he said.