Peso heads for its biggest weekly loss in four months

Manila: The Philippine peso headed for the biggest weekly loss in four months after the central bank closed some higher-yielding deposits and reduced interest rates on remaining accounts. Government bonds rose.

The peso was the second-worst performer in Asia yesterday on concern losses in global credit markets will deter them from adding to their holdings of emerging-market assets.

Local policy makers on Friday stopped offering deposit accounts with maturities of two to six months while lowering rates on other tenors. They kept the benchmark rate at 5 per cent.

"That was in effect an easing of short-term rates," weakening the peso, said Marcelo Ayes, senior vice president for treasury at Rizal Commercial Banking in Manila.

The currency fell 1.6 per cent this week to 41.535 per dollar as of 1:02pm local time, according to Tullett Prebon.