Peso falls to new all-time low of P58.49 vs USD




The Manila Times

Front Page

T HE Philippine peso fell to a new record low against the United States dollar for the third straight day after closing at P58.49 on Thursday. The local currency lost 49 centavos to the US dollar from Wednesday’s P58:$1 after it opened at P58.1 and traded between P58.0 and P58.5. Thursday’s volume also hit $1.51481 billion, higher than the previous session’s $1.05115 billion. This also is the ninth recordhigh closing rate for the US dollar/ peso exchange rate since the start of this year. Since the start of 2022, the peso has depreciated by P7.491, or 14.7 percent, versus P50.999 by the end-2021. The local currency fell again to a new all-time low against the greenback after the US Federal Reserve (Fed) announced another large interest rate hike of 75 basis points for the third time in a row. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., told The Manila Times that the peso weakened after the benchmark 10-year US Treasury yield posted a new 11-year high of 3.62 percent on Sept. 21, 2022. ING Bank, for its part, said that the dollar further strengthened against other currencies following the American central bank’s hawkish move. “With the Fed set to hike a further 100-125 basis points [one ppt (percentage point) to 1.25 ppt] this year, this all points to an even stronger dollar,” ING Bank said. Bangko Sentral ng Pilipinas Deputy Governor Francisco Dakila explained during the Monetary Policy Stance press briefing on Thursday that the peso’s movement is natural in a growing economy. Dakila underscored that the central bank, as an inflation-targeting agency, is ready to “respond” to the foreign exchange if it poses inflation risks. “The peso’s movement is [a] natural consequence of current account dynamics of a growing economy,” Dakila said. The BSP on Thursday raised the country’s benchmark interest rate by 50 basis points to 4.25 percent. “The intention [of the interest rate hike] is not to target a certain level [of exchange rate],” said Dakila. “The priority is bringing inflation back to the target band,” he added.