Peso sinks further as coronavirus continues to spread

THE PESO dropped on Monday and settled at the P51-per-dollar level for the second straight day as more investors opted for safer havens amid fears due to the spread of the coronavirus disease 2019 (COVID-19), which has now triggered an “enhanced community quarantine” for the whole of Luzon island.

The local unit finished trading at P51.50 per dollar, plunging by 47 centavos from its P51.03 close on Friday.

The peso opened the session at P51.25 per dollar. Its weakest was its close of P51.50, while its intraday best was at P50.99 against the greenback.

Dollars traded dropped to $769.39 million from the $1.416 billion seen last Friday.

Analysts said the local unit was tracking the general sentiment of the market which was filled with fears amid the prolonged spread of the COVID-19 that has already triggered a lockdown of the country’s capital.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said Monday’s close is the peso’s weakest in five months and was due to risk aversion due to the COVID-19.

“The peso was also weaker as the local stock market sharply declined and after the whole of Luzon has been put under enhanced quarantine,” Mr. Ricafort said in a text message.

President Rodrigo R. Duterte has put Luzon under enhanced community quarantine which will impose strict home quarantine and no transportation except for frontline health workers, government officials, and other relevant personnels addressing the spread.

Confirmed cases of COVID-19 in the country have hit 140, with 12 deaths recorded as of press time.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion also blamed the peso’s weakness to worries over the pandemic.

“The peso is also tracking the general sentiment around the world as major and advanced countries face this virus fight,” Mr. Asuncion said in a text message.

The US Federal Reserve again opted for an off-cycle rate cut and has announced at least $700 billion in Treasuries and mortgage-backed securities purchases in coming weeks, Reuters reported on Monday.

“The economic outlook is evolving on a daily basis and it is depending on the spread of the virus … That is not something that is knowable,” Fed Chairman Jerome Powell said at the end of an emergency Fed meeting held in place of the Fed’s regular meeting this week.

For today, Mr. Ricafort gave a forecast range of P51.25 while Mr. Asuncion sees the peso moving around P51.30 to P51.60 — L.W.T. Noble with Reuters