Philippine peso closes P56 to $1, weakest in nearly 17 years

MANILA, Philippines – The Philippine peso on Thursday, July 7, closed spot trading at P56.06 against the US dollar, the weakest in nearly 17 years.

RCBC chief economist Michael Ricafort said this is “the weakest for the peso in nearly 17 years or since September 27, 2005, when it closed at P56.295.”

The weakness of the peso comes as the United States Federal Reserve’s monetary policy tightening continued to provide positive sentiment for the dollar. Recessionary fears have pushed the dollar to its strongest levels since 2002.

The Fed’s hawkish stance starkly contrasts with the Philippine central bank’s dovish approach to inflation.

The Bangko Sentral ng Pilipinas, so far, has hiked interest rates by just 50 basis points, despite inflation climbing to 6.1% in June.

Households reliant on remittances from abroad may benefit from the peso’s depreciation, but hot inflation may water down perks.

Philippine exports may also stand to benefit from the current exchange rates, but economists noted that other factors like product quality and price points also come into play in the competition. – Rappler.com