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Monday, August 25, 2003
Peso trades lower (12:30 pm)
MANILA -- Corporate demand for the dollar pushed the Philippine peso lower in early trade Monday, fuelling expectations that the unit will touch its historic low shortly, dealers said.
The local unit traded between 55.275 and 55.330 to the greenback in mid-morning compared to 55.265 late Friday.
"Demand from corporate clients remains. They expect the peso to continue to weaken further in the absence of positive news," a local bank dealer said.
Dealers said the market expects the peso to touch its historic low of 55.750 of January 2001 when political turmoil led to the ouster of then president Joseph Estrada.
The Central Bank was said by dealers to be in the market in early trade, supporting the peso to reduce volatility.
Finance Secretary Isidro Camacho said last week that the peso was sinking too fast.
Analysts have attributed the current peso weakness to political concerns following a recent failed coup attempt against President Arroyo, leadership succession issues in the government and Central Bank as well as corruption allegations against the president's husband, Jose Miguel Arroyo.
Another reason for the peso's weakness is the country's persistent balance of payments deficit since the start of the year as a result of trade deficits and capital flight. AFP
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