Should consider Two (2) sides of the Coin
With the Philippine Central Bank adding the Chinese Renminbi (Yuan) in its basket of currencies, after a 24B agreement was made from doing business with China has now transformed the PHP to some cost savings in directly swapping its local currency with that of the Chinese Yuan without having to deal with a major currency such as the USD. That's one of the good side of the story, but there are relevant effects not directly presented with this move.
China has an advantage with the on/off-shore currency pairs; where the
#USDCNH is likewise traded along with the
#USDCNY through their Hong Kong Dollar counterpart which is pegged to the USD. The PH Central bank does not carry such 'fail-safe' system that can be a protective mechanism in the event that a financial crisis or meltdown in China occurs
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Comparative data analysis from the PBOC - Currency weightings in CFETS RMB Index - which stands for the CHINA FOREIGN EXCHANGE TRADING SYSTEM. Can anyone find the PHP in this composition?
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PHP Historical Price & A Greater Probability of Further Weakness
ReplyDeleteThe worst performing value for the PHP was recorded on April 18-19, 2004 Asian Session. And marked a high @57.50/72 which later pulled back to close 55.75. And marked as the worst devaluation of the PHP against the USD. Which began drifting thereafter.
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