THE Philippine peso closed weaker against the United States dollar at P58.92 on Friday.

The Philippine peso started the day at P58.85, and traded between P58.825 and P58.93 band. The average level for the day stood at P 58.878.

Volume also lowered to $483.34 million from $756.05 million on Thursday.

The local currency shed 26.7 centavos during Friday’s closing after it marginally recovered to P58.653 during the previous session.

The US dollar became stronger against the major global currencies after the latest hawkish signals from officials of the Federal Reserve.

The peso also weakened after global crude oil prices reached new three-week highs a day after OPEC+ (Organization of the Pe

troleum Exporting Countries Plus) cut oil production output by 2 million barrels per day to support oil prices from recent declines.

Since the start of 2022, the peso has depreciated by a total of P7.921, or 15.5 percent, compared to P50.999 in end-2021.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., told The Manila Times that the depreciating peso could lead to higher prices of imports and overall inflation, increasing the possibility of further local policy rate hikes.

“[There might be] even a surprise/off-cycle local policy rate hike to help stabilize the peso as well as overall inflation,” said Ricafort.

He added that a relatively weaker peso would also mean “more intervention” in the local foreign exchange market.

Ricafort said these measures would further siphon off more pesos from the financial system to reduce the pesos used to purchase US dollars.