Peso breaches 46:$1 as China further devalues yuan

The peso breached the 46:$1-mark for the first time in more than five years on Wednesday after China further devalued the yuan.

 

The spot exchange rate closed at 46.26:$1, with the peso dropping 33 centavos from the previous close of 45.93. The local currency languished within the 46 territory throughout the trading session and even sank to an intraday low 46.33.

 

"It's still about China's story. On Tuesday, the central bank weakened the yuan by 2 percent and today they devalued again by almost 2 percent," Bank of the Philippine Islands economist Nicholas Mapa said. 

 

The spot yuan-dollar exchange rate hit a four-year low of 6.43:$1 after the Chinese central bank set the daily midpoint reference at 6.3306, even weaker than the devaluation made on Tuesday, according to Reuters. 

 

The devaluation is intended to make Chinese exports more competitive and consequently address the slowing growth of the world's second largest economy, Mapa said.

 

The recent developments in China could influence the decisions by the Bangko Sentral ng Pilipinas when its policy-setting Monetary Board meets on Thursday, he added. – VS, GMA News