Peso approaches record low, closes at close at P61.71 to US dollar

The Philippine peso dived near its lowest level against the US dollar on Tuesday amid latest uncertainties arising from recent US-Iran clashes.

The local currency shed 11.1 centavos to close at P61.71:$1 from P61.599:$1 on Monday, nearly approaching the record low of P61.75:$1 last seen in May.

In a commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso’s weakness came “after global crude oil prices went up to new one-month highs after the recent US-Iran clashes related to the issues on the Strait of Hormuz… after Trump re-imposed a blockade on Iranian ships transiting the Strait of Hormuz and demanded a 20% reimbursement on all other cargo shipped through the Strait of Hormuz.”

Ricafort, however, said that “the peso exchange rate was relatively stable versus the US dollar recently amid possible intervention/smoothening of market volatility at P61.60-P61.70 per dollar levels recently.”

US President Donald Trump said on Monday that the United States would "probably" take over the Strait of Hormuz and should be reimbursed for controlling the vital waterway.

The International Maritime Organization opposed the plan, saying ships should not pay fees to pass through maritime waterways.

"IMO stands firmly against charging fees for passage through straits used for international navigation. There is no legal basis through which to introduce mandatory tolls simply to transit through a strait," the UN agency said. — BM, GMA News