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Philippines: Peso falls anew, ends at 54.47:$1
MANILA, Philippines — The peso continued its losing streak yesterday, depreciating by another 20.5 centavos to close at its weakest level in nearly 17 years, a day before the anticipated interest rate increase by the Bangko Sentral ng Pilipinas (BSP).
The peso closed at 54.470 from Tuesday’s 54.265 to $1. It opened weaker at 54.30 and hit an intraday low of 54.635 to the dollar.
Trading volume remained heavy at $1.35 billion from $1.39 billion last Tuesday.
This was the weakest level for the peso since closing at 54.740 to $1 on Nov. 21, 2005. The peso has depreciated by 6.8 percent from the end-2021 level of 50.999 to $1.
“The peso exchange rate was again weaker versus the US dollar, by 0.4 percent despite the latest declines in global crude oil prices to new one-month lows on concerns over risk of possible US recession amid more aggressive US Fed rate hikes,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said.
Ricafort said the Monetary Board is expected to hike interest rates by another 25 basis points as a follow-up to the interest rate liftoff last May 19 when it delivered a 25-basis-point rate hike to curb rising inflationary expectations.
“The peso exchange rate would now be partly a function of the expected rate hike in local policy rates. So far the signals have been for a 25-basis-point rate hike,” Ricafort said.
Some economists are expecting an aggressive 50-basis-point rate increase by the BSP after the US Federal Reserve raised key policy rates by 75 basis points last June 15, the largest since 1994.
According to Ricafort, the local currency also depreciated further after the BSP reported that the country’s balance of payments position booked its widest deficit of $1.61 billion in May, the biggest since the $2.02 billion shortfall recorded in February 2021.
Source: https://www.philstar.com/business/2022/06/23/2190213/peso-falls-anew-ends-54471