MANILA - The peso's weakness against the dollar is in step with its Asian peers, as uncertainties in the global economy roil financial markets, the central bank said Friday.
Monetary authorities did not set a target peso-dollar exchange rate this year, but planned the budget on a P48 to P50 per dollar assumption, Deputy Governor Diwa Guinigundo said.
The peso, like China's yuan and Malaysia's ringgit, weakened against the dollar on the prospect of a faster monetary tightening pace by the US Federal Reserve, Guinigundo said.
"This is market-sentiment driven," Guinigundo said the peso's decline. The local currency, the region's worst performer last year according to Bloomberg, touched the P50-level on Thursday.
The central bank had said that it was ready to "smoothen sharp fluctuations" in the exchange rate.
Guinigundo said the BSP was "monitoring very closely" government's plan to impose excise taxes on diesel, which could stoke inflation.
The BSP has factored in up to three interest rate hikes by the Fed this year, he said.