Peso slumps in morning trade after Fed rate hike

The Philippine peso slumped against the US dollar in early trading on Thursday, after the US Federal Reserve hiked rates anew.

The peso opened at P53.3:$1, weaker than Wednesday’s close of P53.23:$1, its worst showing against the greenback in nearly 12 years.
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As of 10:55 a.m., the peso-dollar trading has so far registered an intraday high of P53.31:$1, and an intraday low of P53.26.

“With Fed raising, then US dollar assets get more attractive and really hurts others, including us,” Ed Francisco, president at BDO Capital and Investment Corp., said in a text message.

During its policy meeting on June 12 and 13, the Board of Governors of the Federal Reserve System voted unanimously to raise the interest rates paid on required and excess reserve balances to 1.95 percent starting June 14.

Francisco said market players are now looking at the next policy meeting of the Monetary Board, the Bangko Sentral ng Pilipinas’ policy-setting body.

“Let’s see what our Monetary Board does on June 20,” he said.

The Monetary Board was originally scheduled to hold its policy meeting on Thursday next week, June 21. But the meeting was moved to Wednesday, June 20. —VDS, GMA News