MANILA - The peso on Tuesday hovered at its lowest levels against the dollar since 2006, as the prospect of faster interest rates in the US strengthened the dollar.
The Bangko Sentral ng Pilipinas said there was no reason to worry given the strong economy. Officials said also cited heightened demand for dollars from the government's infrastructure program.
The peso closed at P51.77 on Wednesday, from P51.54 on Tuesday.
"It's nothing unusual considering global uncertainties. We really expect the peso to show up-and-down volatility day to day," BSP Governor Nestor Espenilla Jr told ABS-CBN News.
"It will stabilize soon enough because economic fundamentals remain very solid," he said.
Deputy Governor Diwa Guinigundo said the market was betting on a more hawkish Federal Reserve.
Bloomberg reported that Republican senators were supporting Stanford University economist John Taylor to replace Federal Reserve chairperson Janet Yellen.
The markets see Taylor as someone who could put the Fed on a faster monetary policy tightening path.
"We should not be overly concerned about these peso movements because the peso is flexible enough to reflect the necessary adjustments in the macroeconomy to restore equilibrium," Guinigundo said.