Peso falls for 6th consecutive trading day to carve fresh 11-yr low

The Philippine peso depreciated against the dollar for the sixth consecutive trading day on Monday, as it closed at its worst showing in over 11 years.

The local currency lost 21 centavos to close at P53.48:$1 from last Thursday's P53.27:$1. This is the weakest in almost 12 years since the local currency closed at P53.55:$1 on June 29, 2006.

In a phone interview, a foreign exchange trader from a local bank said Monday's depreciation was due to a confluence of events.

On the local front, the trader said the peso fell against the greenback as market players expect the central bank to retain its rates even amid rising inflation in the country.

"Locally, it's anyone's guess what the BSP will do Wednesday," said the trader, noting the policy meeting of the Monetary Board of the central scheduled on June 20.

BSP Governor Nestor Espenilla Jr. last week said the Monetary Board will scrutinize inflation data and other economic factors during the meeting, where they will decide whether or not domestic conditions warrant a change in monetary policy.

Inflation is one of the key considerations of the MB in deciding whether or not to adjust key policy rates. Just last month, the body decided to hike rates by 25 basis points (bps).

The trader said the peso also continued to depreciate after the Board of Governors of the Federal Reserve System, during its latest policy meeting on June 12 and 13, voted unanimously to raise the interest rates paid on required and excess reserve balances to 1.95 percent starting June 14.

"We're still feeling the effects of the latest US Fed rate hike. " the trader said.

During Monday's trading, the peso-dollar pair noted an intraday low of P53.4:$1, and an intraday high of P53.5:$1, which the trader said prompted intervention from the central bank. — RSJ, GMA News