Just one cent more and the peso exchange rate against the US dollar will reach P59:$1. The peso movement is said to be closely monitored by President Ferdinand “Bongbong” Marcos Jr., according to the Office of the Press Secretary.
In market trading this Tuesday, the peso lost 49 cents to close at a new all-time low exchange rate of P58.99:$1.
This is the 11th all-time low of the peso against the dollar this September: September 2 (P56.77:$1), September 5 (P56.999:$1), September 6 (P57.00:$1), September 8 (P57.18:$1), September 16 (P57.43:$1), September 20 (P57.48:$1), September 21 (P58$1), and September 22 (58.49:$1).
Since January 2022, the peso has depreciated to P7.99 or 15.7% against the dollar, which closed at P50.999:$1 on the last trading day in 2021.
Another weakening of the peso against the dollar occurred after the American Federal Reserve re-implemented an increase in their policy rates by 75 basis points.
“Higher US interest rates or bond yields increase the attractiveness or allure of the US dollar, with high interest rate income on US currency-denominated deposits/bonds/other fixed income instruments,” explained Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael Ricafort in a sent mobile message.
“Local monetary authorities signaled possible surprise or off-cycle local policy rate hike/s, more intervention in the local foreign exchange markets; both of which could help stabilize the peso exchange rate, as well as overall inflation,” he added.
Exchange rate soon to reach P59:$1
This past week, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) also implemented a policy rate hike of another 50 basis points.
This year’s inflation rate is expected to reach 5.6%, higher than the previous forecast of 5.4%.
Ricafort also said that the damage caused by Typhoon Karding (international name: Noru) might affect the local financial markets, increasing the price of food and other agricultural products.
“The peso is also weaker after the local stock market, the PSEi, declined for the fourth straight trading day,” he said.
Meanwhile, Office of the Press Secretary Ttrixie Cruz-Angeles said that even though the peso’s weakening was not discussed in the 9th Cabinet meeting, Marcos is closely monitoring it.
“But, it is a matter for the President, which the President closely monitors on a regular basis,” she added.