Peso “moving in tandem with Asian currencies amid severe exchange rate volatility”: DOF bulletin

September 11, 2018

The Philippine peso, which was three centavos off the P54 to the US dollar in morning trading on Tuesday, "has been moving in tandem with Asian currencies amid severe exchange rate volatility spawned by the global trade war, the Turkey-Argentina crisis and the Fed monetary normalization."

This was announced by the Department of Finance (DOF) economic bulletin as the peso has been closing at 12-year-lows since late last week.

"Year-to-date, the Philippine peso depreciated by 7.39 percent, ranking  third among 12 currencies of the fastest growing Asian countries." the DOF bulletin said.

The DOF said the most depreciated currencies were Indian rupee( 11.7 percent) and Indonesia, by nine percent.

"The countries experiencing the highest depreciations were among the fastest growing countries---India at 8.2 percent, China at 6.8 percent, the Philippines at 6.3 percent and Indonesia at 5.1 percent. These are also the countries with the highest GDP growth rates---India at 8.2 percent, Philippines at 6.3 percent and Indonesia at 5.2 percent," the DOF bulletin said.

The DOF bulletin said that since July 31 when emerging markets were the target of adverse hot money movements as contagion spread from problems in Turkey and Argentina, the Philippine peso depreciated by 0.82 percent, fifth  among eight Asian countries whose currencies depreciated.

"Maintaining good macroeconomic policies, thru manageable fiscal and BOP balances, and adopting economic reforms thru tax reforms and still the best way to sustain growth and investment and, at the same time, steel the economy from external economic shocks," the DOF bulletin said. DMS