Peso drops to over 5-yr. low on oil plunge

The peso on Tuesday lost 11.5 centavos against the dollar to touch new lows unseen in more than five years, as investors shun the risk of holding on to emerging market assets in favor of safe-haven currencies.

"The peso fell to new lows against the US dollar on market risk aversion after oil prices plunged below $30 per barrel anew," said Cherica Vicente, foreign exchange analyst at MetisEtrade.

A dollar fetched P47.995 at the close of trading on the Philippine Dealing & Exchange's trading floor, from P47.880 Monday.

"The last time it reached this low was in more than five years, when the USD-PHP rate averaged 48.139 for the month of September 2009," Vicente noted.

Oil prices crashed on Iraq’s projections that oil production could hit as high as 4 million barrels per day.

"The news on oil influenced stakeholders to flood to safer investments, causing riskier currencies of emerging market economies (such as the peso) to depreciate," Vicente noted. – VS, GMA News