The Philippine Peso closed impressively at ₱49.19 to the U.S. dollar on July 28, the strongest in more than three and a half years. However, Its strength is a result of a vulnerable global financial system.
The peso gained for the 5th consecutive day is at its peak in november 15, 2016 where it reached ₱49.17.
Rizal Commercial Company (RCBC) Chief Economist Michael Ricafort explained a few international trends behind the upsurge of the peso:
- The decline of the US dollar in comparison to international currencies for more than two years despite low interest rates in the U.S.
- Triggered U.S. and China tensions
- Lower demand for safer havens consisting of U.S. dollar in spite of global market investments and developments in covid-19 vaccines
- Increasing cases of COVID-19 that’s taking a toll on the U.S. economy
While the Philippines has the ability to buy more enticing imports, the downside is that the country’s exports may seem unattractive to the rest of the countries because of the high exchange rate of the peso plus families receiving OFW remittances may receive less than what they usually get.
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