Philippine peso gains after China scraps yuan peg

The Philippine currency peso gained sharply against the US dollar in early trade Friday, following other regional currencies, after China decided to scrap the yuan's peg to single US dollar.

At the Philippine foreign exchange market, the peso opened at 55.25 to the dollar, after closing at 55.77 on Thursday. It was the peso's highest intra-day level since June 16.

Philippine central bank governor Amando Tetangco Jr said China's move, which has been widely anticipated, is expected to result in the strengthening of Asian currencies, but in varying degrees.

"Those that appreciate less will gain competitiveness," Tetangco said.

China announced Thursday evening the scrapping of the yuan's peg to the US dollar in favor of a new scheme that will link the yuan to a basket of currencies.

The new yuan rate revalued the currency by 2.1 percent to 8.11 per US dollar from 8.28 previously.

Source: Xinhua