Peso at 7-year high against dirham

DUBAI — Filipino workers in the UAE are facing a dual impact of an increasingly stronger Philippine peso against the UAE dirham and 'indirect' increases in remittance fees.

By Jose Franco

Published: Thu 1 Nov 2007, 8:54 AM

Last updated: Sat 4 Apr 2015, 11:09 PM

Yesterday the peso continued appreciating against the dirham at 11.77, based on the dollar to peso exchange rate of 43.35, following Tuesday's 11-per-dirham level.

The peso peaked to 11.87 against the dirham on Tuesday, the first time in more than seven years, based on exchange rates used by at least four Philippine banks having tie-ups with UAE remittance centres.

It was the strongest performance of the peso since July 6, 2000, when it touched 11.89 to the dirham or 43.76 against the greenback.

Market watchers said the continuing peso appreciation against the dollar — which erodes the dirham-peso exchange rate — was due to strong remittances from overseas Filipino workers (OFWs) and foreign investment inflows into the stock market after a long weekend.

According to traders in Manila, the Philippine central bank, Bangko Sentral ng Pilipinas (BSP), stopped the peso from appreciating further against the greenback by buying $200 million from the spot market on Tuesday.

Reports from Manila said the increase in foreign money that would pour into the country this coming long weekend (due to All Saints' Day celebration) would strengthen the peso further regardless of the rough regional markets. The preceding three-day weekend, due to "barangay", or village, elections held on Monday, had also accumulated inflows from foreign remittances and investments.

Majority of the more than 10 million OFWs worldwide have the shell out more money for their fixed amount of remittances sent on a regular basis.

The strong peso has also hit hard the Philippine exporters, whose earnings shrink when they change their dollars into pesos and they grapple against higher prices in the global market.

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