Peso holds at 53 vs $1 after Fed raises rates

ABS-CBN News

Posted at Jun 14 2018 11:23 AM

A staffer counts dollar bills at a money changer shop in Manila. Jonathan Cellona, ABS-CBN News/File

MANILA -- The peso weakened further against the dollar on Thursday, holding at its lowest in 12 years, after the Federal Reserve raised interest rates and signaled up to 2 more this year.

The peso opened at P53.30 to the dollar from P53.23 on Wednesday. The Fed's move could shift funds seeking higher yields away from emerging markets, analysts said.

"They’re already pulling out of the Philippines. And I think they’re doing so in such speed that the peso has been free-falling for the last few days," Regina Capital head of sales Luis Limlingan told ANC's Market Edge.

The 6-percent depreciation in the peso's value from 2017 can be "problematic" given the country's dependence on dollar remittances from expatriate workers, said The Economist Intelligence Unit analyst Anwita Basu.

President Rodrigo Duterte's economic managers have played down the peso's weakness, saying a strong dollar would increase the value of remittances and BPO earnings, both denominated in dollars.

Financial markets are closed on Friday for the Eid'l Fitr or the end of the Muslim holy month of Ramadan.