The Philippine peso traded near a three-year low on speculation improving U.S. data will prompt the Federal Reserve to cut stimulus, while the Asian nation’s planning chief said the currency’s decline benefits the economy.
Philippine central bank Deputy Governor Diwa Guinigundo said policy makers will probably raise inflation forecasts for 2012 and 2013, signaling the bank may pause after three interest-rate cuts this year.
The Philippine central bank will have more latitude in setting monetary policy, Deputy Governor Diwa Guinigundo said, commenting on the decision of the U.S. Federal Reserve to replace $400 billion of short-term debt in its portfolio with longer-term Treasuries.
The Philippine central bank has no current need to raise interest rates from a record low, while policy makers will be “pre-emptive” should their inflation target come under threat, a deputy governor said.
Super Typhoon Haiyan battered the central Philippines, triggering landslides and storm surges that killed hundreds of people, destroyed an airport, cut power and phone lines and damaged crops before heading to Vietnam.