Peso weakens but comes off lows after stocks rebound
THE peso weakened against the dollar Friday as the market absorbed news of the further spread of coronavirus disease (Covid-19) in the Philippines, but came off its lows after a stock market rebound.
The currency ended trading at P51.03 Friday, following a P50.85 close Thursday, according to data from the Bankers’ Association of the Philippines.
Week-on-week, the peso declined from its March 6 close of P50.64.
The currency opened the session at P51.25., hitting a low of P51.31 and a high of P50.85.
Dollar volumes rose to $1.416 billion from $1.375 billion Thursday.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said that the currency’s decline came on the back of an increase in domestic Covid-19 infections.
“The peso was holding up early part of the week until yesterday morning when it was clear that local transmission of Covid-19 in Metro Manila is escalating,” he said in a text message.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the peso close on Friday was weakest in more than two weeks.
The drop came a few hours after the announcement of the community quarantine declaration for Metro Manila “as this could lead to slower economic growth and some stockpiling by households,” Mr. Ricafort said in a text message.
Mr. Ricafort also noted that the peso recovered from its intraday weakest of P51.31 reflecting the positive turnaround in the local stock market.
The Philippine Stock Exchange rose 57.67 points or 1% to 5,793.94 after falling 9.71% Thursday, the biggest decline in 12 years at the height of the subprime mortgage crisis.
President Rodrigo R. Duterte imposed one month of movement restrictions into and out of Metro Manila on Thursday to prevent the further spread of the virus. The restrictions cover domestic land, sea, and air travel to and from the National Capital Region starting March 15.
The Department of Health has registered 52 Covid-19 patients as Thursday, with two deaths reported. — Luz Wendy T. Noble
