Peso weakens anew vs dollar as gov’t cuts outlook for agriculture sector


THE PESO retreated versus the buck on Wednesday on account of risk-off sentiment as the federal government lowered its goal for the agriculture sector’s progress.

The native unit closed at P49.75 per greenback, weaker by 14 centavos from its P49.61 shut on Tuesday, primarily based on knowledge from the Bankers Affiliation of the Philippines.

The peso opened Wednesday’s session at P49.85 per greenback, which was additionally its weakest exhibiting for the day. In the meantime, its intraday finest was at P49.59 versus the buck.

{Dollars} exchanged slipped to $1.041 billion on Wednesday from the $1.098 billion recorded on Tuesday.

The revision of the expansion goal for the agriculture sector and its ensuing affect on the economic system induced risk-off sentiment, Rizal Industrial Banking Corp. Chief Economist Michael L. Ricafort mentioned.

The Division of Agriculture on Wednesday mentioned it trimmed its 2021 progress goal for the farm sector to 2% from 2.5% beforehand, citing the affect of the African Swine Fever and the lockdowns.

In the meantime, a dealer attributed the peso’s weak spot to safe-haven demand amid stories of the US Treasury division taking steps to forestall hitting their debt ceiling.

US Treasury Secretary Janet Yellen on Monday via a letter to Home Speaker Nancy Pelosi and different congress leaders mentioned she was suspending investments within the Civil Service Retirement and Incapacity Fund and the Postal Service Retiree Well being Advantages Fund that aren’t instantly required to pay beneficiaries, Reuters reported.

The transfer was seen as a step to maintain the federal authorities’s borrowing capability below a reinstated debt restrict. A two-year debt-ceiling suspension expired on Saturday, which suggests the effectivity of the cap on the present debt stage of about $28.5 trillion.

Ms. Yellen warned Congress in late July {that a} important date could possibly be Oct. 1, when the federal government faces $150 billion in obligatory funds because the 2022 fiscal yr begins.

For at present, Mr. Ricafort gave a forecast vary of P49.60 to P49.80 per greenback, whereas the dealer expects the native unit to maneuver between P49.65 to P49.90. — L.W.T. Noble with Reuters

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