Peso weakens on rise in new COVID cases

The peso weakened against the dollar Friday on the sustained increase in the daily tally of new coronavirus cases.

The currency closed at P48.085 to the dollar Friday, against its finish of P48.054 Thursday, according to data from the Bankers Association of the Philippines.

The peso opened at P48.07, hitting a low of P48.095. The high was P48.06.

Dollar volume surged to $1.09 billion, from $599.4 million previously.

“The peso was weaker vs. the dollar after new COVID-19 cases lingered higher, near 2,000 per day, the highest in more than a month and after some delay in the rollout of the Sinovac COVID-19 vaccine to March 2021 (from February 2021), in view of the 10-day inspection of inbound vaccine shipments,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said via Viber.

The Health department reported on Friday 2,178 new coronavirus cases, boosting the overall count to 509,887. It reported 20 new deaths, bringng the total to 10,136.

“The peso depreciated from market concerns due to the possible impact on the economic recovery prospects from new COVID-19 strains,” a trader said via e-mail.

Week-on-week, the peso appreciated by two centavos from its P48.065 finish on Jan. 15.

The peso ”was almost unchanged this week at P48.085. It remained trapped within a narrow range as the central bank still sees ample room to maintain its easy policy,” Jonathan L. Ravelas, chief market strategist at BDO Unibank Inc., said in a text message.

The Bangko Sentral ng Pilipinas reduced key policy rates by 200 basis points last year, bringing down the overnight reverse repurchase, lending and deposit rates to record lows of 2%, 2.5%, and 1.5%, respectively. — Beatrice M. Laforga