Philippine peso breaches P53 to $1 level, falls to 12-year low

MANILA, Philippines – The Philippine peso has breached the P53 to $1 level, falling to a 12-year low as markets anticipated the US Federal Reserve to announce another interest rate hike.

The peso closed at P53.23 on Wednesday – its weakest level since closing at P53.55 to $1 on June 29, 2006.

The peso opened weaker at P53, and hit an intraday low of P53.26. 

The Bangko Sentral ng Pilipinas’ Monetary Board will hold a policy meeting on June 21, said BSP Governor Nestor Espenilla Jr.

“Recent developments on inflation and economic activity are key inputs but these are certainly not the only consideration. We’ll be examining closely all potential drivers of future inflation through the various transmission channels as affected by global developments, expectations formation, and uncertainty,” Espenilla said.

“It’s a fairly complex environment that we need to navigate,” he added. 

ING Bank Manila senior economist Joey Cuyegkeng cited factors that have pulled down the peso and other currencies in emerging markets, among them external factors such as the continued tightening of US monetary policy.

At home, among some of the factors affecting the peso strength, he said, include the wider trade deficit, enhanced fiscal deficit spending, and the bigger current account deficit  because of inadequate remittances from overseas Filipinos and receipts from the business process outsourcing (BPO) sector. – Rappler.com