Peso drops beyond 51 to the dollar

The peso briefly touched the 51.08:1 USD level, before settling at an almost 11-year low, the weakest since August 29, 2006’s when it hot 51.05:1 USD. Chief market strategist at BDO Unibank. Jonathan Ravelas said that the foreign exchange was only “reacting to the region’s risk-off theme as the rising geopolitical tensions are creating a risk-off and flight to quality,” referring to US-North Korea tensions. BSP Governor Nestor Espenilla Jr. told reporters that they are constantly monitoring peso developments and will take appropriate actions when necessary. The BSP expects 2017’s current account to slump to a $600 million deficit from 2018’s $600-million surplus. This is largely due to the forecasted 10% growth in imports, while exports are only expected to grow by 5%. He added that the stable stream of remittances from OFWs and dollar receipts from the business process outsourcing industry will help keep the peso’s volatility at an acceptable magnitude.