Peso drops back to P58:$1 level

The Philippine peso ended the week on a soft note as it slipped back to P58:$1 level on Friday, after two straight days of being closed for trading due to Severe Tropical Storm Kristine.

The local unit shed 44 centavos to close at P58.32:$1, from its previous finish of P57.88:$1 on Tuesday, October 22.

This is the weakest for the peso in nearly three months or since August 1, 2024, when it closed at P58.33:$1, Rizal Commercial Banking Corp. chief economist Michael Ricafort said in a commentary.

The local unit’s weakness was attributed to the effectivity date of the cut in banks’ reserve requirement ratio (RRR), announced last September 20. 

Ricafort said the RRR cut “released about P400 billion into the financial system,” which empowered banks to “have the flexibility to increase loans, investments in bonds other fixed income securities, equities/stocks, other investments, but there would also be more pesos that could be used to buy US dollars and other foreign currencies.”

“The peso also weakened recently versus the US dollar as the markets priced in a possibility of a Donald Trump victory that led to higher US dollar versus major global currencies to near three-month highs…,” he said.—LDF, GMA Integrated News