BANKING & FINANCE: MANILA- Peso weakens further vs dollar:

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THE PESO weakened further on Tuesday as the war in Eastern Europe continues, with Russia threatening retaliation for sanctions imposed by Western economies.

The local unit closed at P52.32 per dollar on Tuesday, sinking by 14 centavos from its P52.18 finish on Monday, based on Bankers Association of the Philippines data.

This is the peso’s worst finish in more than two years or since it ended at P52.231 per dollar on Aug. 28, 2019, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The peso opened weaker at P52.25 per dollar. Its weakest showing was at P52.34, while its intraday best was at P52.01 against the greenback.

Dollars exchanged declined to $1.334 billion on Tuesday from $1.58 billion on Monday.

“The peso continues to weaken on safe-haven demand after Russia launched a drone attack in a Ukrainian airport,” a trader said in an e-mail.

Meanwhile, Mr. Ricafort said the local unit depreciated amid oil worries as Russia threatened to cut its supply of natural gas to Europe.

Reuters reported that a Russian official said a possible closure of the main Russia-Germany gas pipeline could severely affect energy supply and oil prices across the world.

“It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market,” Russian Deputy Prime Minister Alexander Novak said in a statement on state television.

“The surge in prices would be unpredictable. It would be $300 per barrel if not more,” he added.

Mr. Novak said Europe may need more than a year to find a new source for the volume of oil it receives from Russia, aside from paying a more costly price. He noted that Russia supplies 40% of Europe’s gas. Last month, Germany froze the certification of the Nord Stream 2 gas pipeline as a sanction for Russia’s invasion in Ukraine.

For Wednesday, Mr. Ricafort gave a forecast range of P52.10 to P52.40 per dollar, while the trader expects the local unit to move within P52.20 to P52.45. — L.W.T. Noble with Reuters