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THE PESO lost more ground against the US dollar after an early afternoon explosion in the grounds of Malacaņang further unnerved a market already worried about fresh coup rumors, dealers said.

Extending its losses for the fourth session in a row, the peso closed at 51.98 to the dollar, its weakest for the day and its lowest closing level since Feb 2, when it finished at 52.09 to the greenback. Total volume reached 362.2 million dollars.

It had closed at 51.80 to the dollar last Friday.

On Monday last week, the peso hit a new three-and-a-half year high on the back of rosy financial prospects for the government this year and strong foreign exchange inflows.

"Many banks immediately covered their short positions after news about the explosion reached the market," a dealer at a local commercial bank said.

The central bank, however, was not in the market on Monday, dealers said.

The central bank "probably decided not to intervene because there was legitimate corporate demand for dollars and the explosion did not cause panic in the market," another dealer said.

There were no casualties or damage after the explosion at the presidential palace. With INQ7.net

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