Peso churns weakness amid US debt ceiling concerns
MANILA, Philippines — The peso on Wednesday retreated as sentiment drooped amid as US debt ceiling talks remain in limbo, reversing its upbeat performance on Tuesday.
The local unit closed at P55.77 against the greenback, weaker than its previous close of P55.72.
Sentiment across global equities is struggling as the US government has yet to agree on its debt ceiling, which could avert a default for the superpower.
That said, economic managers were bullish that the peso would emerge stronger against the US dollar this year, in the range of P53-57 versus the greenback. Their optimism was fueled by the Bangko Sentral ng Pilipinas’ normalization of monetary policy and expectations of higher tourism revenues and remittances from overseas Filipinos.
The central bank has injected 425 basis points into the key policy rate. Interest rates currently stood at 6.25%.
Sought for comment, Nicholas Antonio Mapa, senior economist at ING Bank in Manila, said the local unit tracked regional weakness.
“PHP however continued to move in the middle of the pack and was actually one of the better performers for the month with some follow through boost post Fitch outlook decision,” he said in a Viber message. — Ramon Royandoyan
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