Peso dives to P58.999 vs US dollar

THE Philippine peso on Tuesday fell to a new record low against the US dollar after closing at P58.999.

It opened the day at P58.8 after trading was suspended on Monday because of Typhoon "Karding."

The peso also traded between P58.7 and P58.999, resulting in an average of P58.904.

Tuesday's volume reached $1.0622 billion, up from $985 million the previous session.

The local currency remained weak against the US dollar for the fifth trading day by 49 centavos amid the continued increase in the US dollar versus major global currencies.

Tuesday's data followed previous records on September 2 (P56.77:$1), September 5 (P56.999:$1), September 6 (P57.00:$1), September 8 (P57.18:$1), September 16 (P57.43:$1), September 20 (P57.48:$1), September 21 (P58.00:$1), September 22 (P58.49:$1), and September 23 (P58.50:$1).

Since the start of 2022, the peso depreciated by P7.99 or 15.7 percent compared to the P50.999: $1 by the end-2021.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort attributed the peso's weakness and the plunge of most currencies to the US Federal Reserve's aggressive rate hikes to combat inflation.

"Record low British pound (GBP/US dollar) and weaker euro also added to the strong US dollar story/narrative," Ricafort told The Manila Times in a Viber message.

He said sentiment on the peso and local financial markets was also weighed down by Super Typhoon Karding's damage, especially to agriculture. 

Ricafort added that damage caused by the super typhoon could lead to "some pick-up" in food or agricultural prices and overall inflation.

The RCBC's chief economist said the peso's next resistance may reach P59.00 to P59.25 levels.

According to the Office of the Press Secretary also on Tuesday, President Ferdinand "Bongbong" Marcos Jr. is "closely monitoring" the value of the Philippine peso against the US dollar "on a regular basis."

"The President is in constant touch with the economic team, and they are closely monitoring this," Press Secretary Rose Beatrix "Trixie" Cruz-Angeles said at a press briefing.

"As you know, the inflation rate isn't due to any local factors. It's really about the exchange rate," Cruz-Angeles added.

On Monday, the International Monetary Fund slashed its 2022 growth forecast for the Philippines from 6.7 percent to 6.5 percent because of the impact of the global economic slowdown.

Marcos' economic team lowered its growth expectations for this year to 6.5 percent from 7.5 percent.

When sought for comment, Cruz-Angeles opted to defer to the wisdom of the country's economic team.

"We will have to see about that. Our economic managers forecast a higher growth. So, they are in a much better position to make that determination in that forecast," the Palace official said.

"Our fundamentals are strong. Our economy is in good resurgence, and we are experiencing a good rate of growth right now. So, we will have to see in the end whether that forecast is going to be more accurate than the local forecast," she added.



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