Peso falls to new low of P57.48:$1

The Philippine peso depreciated against the US dollar on Tuesday to hit a record low for the seventh time so far this year, ahead of the anticipated rate hike in the United States.
 
The local currency lost 8 centavos to close at P57.48:$1 from Monday’s finish of P57.4:$1.
 
This is the seventh all-time low so far this year, following previous records on September 2 (P56.77:$1), September 5 (P56.999:$1), September 6 (P57.00:$1), September 7 (P57.135:$1), September 8 (P57.18:$1), September 16 (P57.43:$1), and September 20 (P57.48:$1).
 
The peso has already depreciated by P6.841 or 12.7% from P50.999:$1 on the last trading day of 2021.
 
Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort attributed Tuesday’s depreciation to the anticipation of a rate hike during the next policy meeting of the Federal Reserve on Wednesday, September 21.
 
The Federal Reserve is widely expected to increase interest rates by up to 100 basis points.
 
“[T]hat increases the attractiveness/allure of the US currency with higher interest rate income on US dollar deposits/fixed income investments/securities,” Ricafort said in a mobile message.
 
In Manila, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) will meet on Thursday, September 22, to discuss whether or not current conditions warrant a change in policy rates.
 
BSP Governor Felipe Medalla has maintained his hawkish stance, stating that food supply and petroleum prices must be addressed before a pause in tightening can be considered.
 
The peso’s weakness also came as the 10-year US Treasury yield hit a new 11-year high of 3.52% on September 19, which effectively increased the dollar-denominated bond yields.
 
It also comes after the release of the latest balance of payments data, indicating that the year-to-date deficit stood at $5.492 billion as of end-August, versus $253 million last year.
 
Ricafort said some factors which could offset the peso's weakness include the lower global crude oil prices, which could also lower the country’s oil and commodity imports.
 
Oil firms on Tuesday cut prices per liter of diesel by P4.15 and kerosene by P4.45, while keeping gasoline unchanged. — VBL, GMA News