Philippine Peso Falls to 7-Year Low on Concerns About Duterte
September 26 2016 - 4:30AM
Dow Jones News
The Philippine peso dropped to a seven-year low against the U.S.
dollar Monday as concerns rise about political instability under
President Rodrigo Duterte.
The U.S. dollar rose to an intraday high of 48.26 pesos, a 0.6%
pullback in the peso for the day. It was the peso's weakest level
against the U.S. dollar since September 2009, worsening the monthly
loss to 3.5%.
Mr. Duterte, who was elected to office in May, has lashed out at
the European Union and U.S. President Barack Obama in recent weeks,
often using profanity. Mr. Obama canceled a planned meeting with
Mr. Duterte that would have been the first between the two leaders,
after the Philippine president's outburst earlier this month.
Mr. Duterte is also embroiled in a violent anticrime campaign
that has claimed more than 3,000 lives and sparked international
criticism.
Last week, Standard & Poor's ratings company said the
predictability of policy-making in the Philippines has "diminished
somewhat" under Mr. Duterte. The firm said it may lower the
country's sovereign ratings if the reform agenda stalls or if
certain economic metrics deteriorate.
"It's political risk that's impacting investor sentiment," said
Krystal Tan, Asia economist at Capital Economics. Mr. Duterte "is
just very unpredictable. The fear that he will suddenly change his
mind...is more heightened now," she added.
Investors pulled roughly $310 million out the country's stock
market over the course of a month, according to a note from HSBC
dated Sept. 19. HSBC characterized the outflows as significant in
helping to drive the peso lower.
The Philippines' benchmark PSEi stock index has fallen nearly 2%
so far this month, although it surged more than 10% in the past
year.
Expectations for a slowdown in economic growth and a decline in
the country's current-account surplus could be adding to downward
pressure on the peso, said Joey Cuyegkeng, senior economist for
Asia at ING.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
(END) Dow Jones Newswires
September 26, 2016 04:15 ET (08:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
HSBC (NYSE:HSBC)
Historical Stock Chart
From Aug 2024 to Sep 2024
HSBC (NYSE:HSBC)
Historical Stock Chart
From Sep 2023 to Sep 2024