Peso slides back to all-time low of P59:$1

The Philippine peso depreciated for the third straight trading day to close at P59:$1 on Monday, matching the all-time low hit in the past week, as the market digested recent economic data on dollar reserves and foreign investments.

The local currency shed 8 centavos to close at its intraday low of P59:$1. This is the same close recorded last Monday, October 3, 2022, and the 12th all-time low of the peso so far this year.

Monday’s performance comes after the Bangko Sentral ng Pilipinas (BSP) released key data — the Philippine dollar reserves at a two-year low in September, and the foreign direct investments at a 14-month low in July.

“The US dollar/peso exchange rate higher for the third straight day… after the latest gross international reserves data at new two-year lows at $95 billion and the net foreign direct investments data at new 14-month lows,” Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said in a mobile message.

Ricafort also attributed the recent depreciation to the decline in the local equity market, which also slipped for the third straight trading day.

The main PSEi lost 99.61 points or 1.68% to 5,832.58 at the closing bell, while the broader All Shares index lost 51.49 points or 1.61% to 3,149.10.

More than 325.663 million shares, valued at P2.527 billion, changed hands. Decliners led advancers, 158 to 36, and 37 issues were unchanged.

“The peso also weaker today after the recent upward correction of the US dollar vs. major global currencies recently after continued hawkish signals from Fed officials and after the better-than-expected US jobs/employment data,” Ricafort said.

Ricafort noted, however, that the peso/dollar exchange rate has continued to stabilize for the third straight week at below the P59 psychological mark, with recent policy signals possibly supporting it moving forward.

The signals include tighter restrictions in banks’ reporting of foreign exchange transactions, the increased intervention in the local forex market, and plans to boost the central bank’s debt issuances, among others.

Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla last Friday said the central bank will not allow excessive fluctuations in the foreign exchange rate.

He also said the BSP is looking at issuing more Central Bank bills (CBBs), in a bid to mop up excess liquidity in the country’s financial system.—LDF, GMA News