Dubai: The Philippine peso has plunged to its lowest level in ten years and it’s likely to weaken further, according to the latest analysis.
The Asian currency’s value hovered between 14.11 to 14.12 against the UAE dirham on Thursday afternoon, registering an approximately 17 per cent decline in a decade, based on figures provided by various currency trackers.
It’s the peso’s lowest level against the UAE currency since October 29, 2007, when it traded at a little over 12 per dirham, data from OFX showed.
“This is certainly the lowest the peso has fallen so far this year,” said one money exchanger in Dubai.
“The peso has been weak and the response we’ve had so far this week is positive. We’ve seen an uptick in remittances among Filipino expats over the last few days,” she said.
The fall of the currency has been attributed to the current political tensions in the Philippines, although the recent rally posted by the US dollar may have played a part as well.
The US dollar, to which the UAE currency is pegged, had earlier showed some strength against its rivals before easing slightly on Thursday as the markets awaited the results of the European Central Bank meeting,
A strong greenback or UAE dirham is beneficial for the hundreds of thousands of Filipinos working in the country as it means higher remittance power. The more the dirham gains in value against the peso, the more money expatriates can send to their home country.
Promoth Manghat, CEO of UAE Exchange Group, said there are indications that the peso will fall further. “[The Philippine currency] looks fundamentally weak and we expect it to depreciate further,” Manghat told Gulf News.
“A weaker [peso] is good for expatriates as it gives an opportunity to remit more money home. It is positive for local exporters as well, as it makes their goods competitive in the global market,” said Manghat.
He said remittance transactions by Filipinos have yet to pick up as a result of the favourable exchange rate. “But we do expect remittances to pick up if the peso’s weakness continues.”
