BENGALURU: The Philippine peso and shares declined on Thursday due to political turmoil in the country, after the incumbent vice president resigned from the president’s cabinet, while other emerging Asian currencies fell against a steady dollar.
The peso, which has depreciated around 5.7% this year, lost 0.2%, eyeing its worst day in nearly three weeks, while stocks shed as much as 0.4%, their lowest level since May 30.
Philippine Vice President Sara Duterte left President Ferdinand Marcos Jr’s cabinet and resigned as the education minister and vice chair of an anti-insurgency task force amid ongoing rumours that the alliance between them was expected to collapse.
“Vice President Sara Duterte has quit from the (Marcos) government… highlighting signs of rift within the administration. We continue to keep a close eye on the domestic political developments,” analysts at Maybank said.
“We continue to see upside risks to the USD/PHP pair due to both idiosyncratic and external factors.”
Duterte will, however, remain the Vice president of the Philippines.
Globally, market participants are awaiting fresh cues on the Federal Reserve’s interest rate trajectory, after the US central bank signalled only one rate cut in 2024 last week.
At 0440 GMT, the dollar index was unmoved at 105.260.
Other emerging Asian currencies, such as the Singapore dollar, Malaysian ringgit and Taiwan dollar traded flat.
In Indonesia, focus will be on the central bank’s monetary policy decision, due later in the day. It is expected to maintain its key rate, with a depreciating rupiah, which is currently hovering at four-year lows.
