Philippine peso hits new 3-year high of P49.19 to $1
The Philippine peso closed stronger at P49.19 to the United States dollar on Tuesday, July 28, the strongest in more than 3 and a half years. However, economists say that the peso’s strength may be a symptom of a weak economy.
The pesos is at its strongest since November 15, 2016, when it closed at P49.17.
Rizal Commercial Banking Corporation chief economist Michael Ricafort enumerated the following as some global developments behind the strengthening of the peso:
- Lingering weakness of the US dollar against major global currencies to the lowest in more than 2 years, amid relatively low US interest rates
- Increased US-China tensions
- Less demand for safe havens such as the US dollar amid improved global market risk appetite, especially amid developments on possible COVID-19 vaccines
- Spike in new COVID-19 cases in some US states that could be a drag on US economic recovery
ING Bank Manila senior economist Nicholas Mapa added, “I wouldn’t say it’s bad for us or good for us, there are always winners and losers to that argument, but it’s a symptom really of what’s happening in the economy.”
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