Philippine peso gets beating anew

MANILA, Philippines - The peso on Friday extended its losing streak against the dollar on the back of Wall Street’s worst two-day slide and a hefty cut in local banks’ reserve requirements. The Philippine currency shed nearly 25 centavos to close at P48.80 per dollar from Thursday’s P48.555. US retail chains reported the worst October sales results in more than three decades, cementing beliefs that the world’s largest economy is into a deepening slump. US stocks tumbled close to 5% on Thursday following the bleak sales report. "Risk aversion was there again," said Rafael S. Algarra, Jr., treasurer of Security Bank. Banks were also locked in a debate on whether Friday’s move by the Bangko Sentral ng Pilipinas to slash banks’ reserve ceilings by two percentage points would help the peso. Some currency traders believed that while the cut would boost liquidity, more pesos flowing in the financial system and chasing after dollars would distort the exchange rate. Still, Mr. Algarra said the easing in reserve requirements would favor the peso in the long run by boosting market confidence. The peso opened at its intraday high of P46.65, reached a low of P48.91 per dollar, and averaged at P48.798 per dollar. Volume of transacted dollars expanded to $640 million from $548.47 million.