Peso dives further to hit new record low of P57:$1

The Philippine peso continued its downtrend for the fourth straight trading day on Tuesday to carve another all-time low, as the dollar sustained its strength amid strong demand.

The local currency lost 0.1 centavos to close Tuesday at its intraday low of P57:$1, surpassing the previous record low of P56.999:$1 recorded on Monday.

The US dollar has continued to appreciate against most regional currencies, with Federal Reserve officials maintaining a hawkish stance and Chair Jerome Powell signaling tight monetary policy “for some time.”

“Still on USD strengthening on Fed hike signals, plus import season is starting so more demand for USDs locally,” Security Bank chief economist Robert Dan Roces said in a mobile message.

The country historically imports more during the latter part of the year in time of the Christmas holidays, and this is usually accompanied by more remittance inflows being sent by Filipinos overseas.

“Peak remittance season is coming up, so it may help cap the weakening,” Roces said.

“However, this still depends on how strong the USD will get given the Fed’s hike pace,” he added.

Locally, the Bangko Sentral ng Pilipinas (BSP) has raised rates by 50 basis points in August, 75 basis points in an off-schedule hike in July, and 25 basis points each in June and May.

BSP Governor Felipe Medalla has since hinted at the possibility of more policy tightening, as food supply and petroleum prices would first have to be addressed before a pause can be considered.

Inflation clocked in at 6.3% in August, slower than the 6.4% in July but still faster than the central bank’s target range of 2% to 4%. — BM, GMA News