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Peso sinks back to P56:$1 level
By JON VIKTOR D. CABUENAS,GMA NewsThe Philippine peso softened against its US counterpart for the seventh straight trading day on Monday to sink back into the P56:$1 level and mark its weakest performance in a month.
The local currency shed 28 centavos to close Monday at P56.21:$1 versus last Friday’s finish of P55.93:$1. This is the worst showing of the peso since July 22, 2022 when it closed at P56.28:$1.
The latest depreciation comes after St. Louis Fed President James Bullard last week hinted that he was leaning more into a 75-basis-point increase during the September review, which would be the third straight 75-basis-point interest rate hike should it be realized.
“The peso exchange rate weakened… as the hawkish Fed signals amid the need to fight elevated US inflation supported the upward correction in the US dollar vs. major global currencies,” Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael Ricafort said in a mobile message.
Locally, the Bangko Sentral ng Pilipinas (BSP) last week hiked key policy rates by 50 basis points
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BSP Governor Felipe Medalla hinted at the possibility of more policy tightening, but this would be smaller movements moving forward as he noted it could be 0, 25 basis points, or even 50 basis points.
“The peso also weakened after the local stock market, the PSEi, declined sharply today,” Ricafort added.
The main PSEi lost 159.45 points or 2.32% to close at 6,704.41, while the broader All Shares index shed 57.64 points or 1.59% to 3,577.93.
More than 816.983 million shares, valued at P5.443 billion, changed hands. Decliners trumped advancers, 132 to 62, and 39 issues were unchanged.
“The PSEi also corrected lower a day before the Retail Treasury Bond auction and offering, which could siphon off some of the excess funds from the financial system,” Ricafort said. — DVM, GMA News