Peso plunges to P55:$1 level

The Philippine peso retreated against its US counterpart on Wednesday, to mark a fresh 16-year low in line with the decline in the local equities market.

The local currency lost 29 centavos to close at P55:06:$1 versus Tuesday’s finish of P54.77:$1. This is the weakest since October 27, 2005’s close of P55.08:$1.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort attributed Wednesday’s depreciation to the movement in the local stock market.

“The latest peso exchange rate movements partly due to the healthy downward correction in the PSEi today, after rising for three straight days, considered a healthy correction,” he said in a mobile message.

“The latest currency movements also came after the US dollar corrected higher vs. major global currencies after continued hawkish signals from some Fed officials,” 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.

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.

Meanwhile, the main PSEi shed 42.22 points or 0.67% to close at 6,303.19, while the broader All Shares index declined by 11.56 points or 0.34% to 3,389.12.

More than 532.415 million shares, valued at P4.913 billion, changed hands. Decliners led advancers, 98 to 97, while 45 issues were unchanged.

The slump in local stocks was attributed to the weak consumer confidence in the United States, with market players monitoring overseas developments regarding COVID-19 restrictions.

“Philippine shares gave up early-session gains following a disappointing US consumer confidence index reading, which came in at 98.7,” Regina Capital Development Corp. Head of Sales Luis Limlingan said in a mobile message.—AOL, GMA News