Peso Drops To 54.31 To US$1
The local currency slid further, closing yesterday at levels not seen since 13 years ago.
The peso fell as low as 54.66 per US dollar on Tuesday, its weakest level since November 22, 2005, when it closed at 54.99 versus the dollar.
Local financial markets reacted with a sell-off, which saw the benchmark Philippine Stock Exchange index (PSEi) plunging by 101.44 points to end at 7,332.17.
Investors are reportedly waiting for the Bangko Sentral ng Pilipinas (BSP) meeting which will be held on Thursday with speculation that the Monetary Board is deciding whether to raise interest rates further after inflation hit 6.4 percent in August.
Last month, the BSP had raised its overnight borrowing rate by 50 basis points to address rising inflation but given the aftermath of Typhoon Ompong and its impact on commodity prices, stronger anti-inflation measures could be on the way.
Land Bank of the Philippines market economist Guian Angelo Dumalagan was quoted in local media attributing the weak peso to “safe-haven buying amid escalating US-China trade tension after both countries imposed more tariffs on each other”.
Dumalagan added that the peso is seen remaining above the 54 to $1 level going forward in the near term.
“The exchange rate may move within the 54. 20 to 54.40 range,” he said.