Peso rebounds from 16-year low

The Philippine peso strengthened against the US dollar on Monday, after closing at a 16-year low last week amid the latest hawkish statements of the US Federal Reserve.

The local currency gained 20.5 centavos to close at P54.78:$1. It hit an intraday high of P55.15:$1, and an intraday low of P54.78:$1 during the session.

The latest finish compares with last Friday’s P54.985:$1, which was the weakest since its close of P55.08:$1 on October 27, 2005.

According to ING Bank Manila senior economist Nicholas Mapa, the peso continued to be impacted by concerns over the rate hikes in the United States moving forward.

“PHP was on the backfoot again today given lingering uncertainty given the pace of the Fed’s rate hike cycle and the negative fallout from the conflict in Eastern Europe,” he said in an emailed commentary.

“PHP may also be pressured given relatively dovish stance of BSP against the backdrop of a very hawkish Fed,” he continued.

Federal Reserve chair Jerome Powell earlier this month said the 75-basis point hike was “essential” to tame inflation, adding that policymakers have the arsenal it needs, and the resolve to restore price stability moving forward.

Meanwhile, the Bangko Sentral ng Pilipinas (BSP) last week hiked key policy rates by 25 basis points, marking the second straight month of hikes. This is, however, lower than the market expected.—AOL, GMA News