Peso hits new record low of P63.361 vs dollar

MANILA, October 22 ------ The peso sank to another record low yesterday, October 21. The peso closed at P63.361 against the dollar at the end of Wednesday's trade. Its previous record low was P63.09 on October 19.

The continuous slide of the Philippine peso past 63 against the US dollar has heightened expectations of further monetary tightening by the Bangko Sentral ng Pilipinas, with rate hikes anticipated next week and in December. The BSP Monetary Board is set to meet on Thursday this week.

A weaker peso is expected to make oil purchases even more expensive as the commodity is purchased with dollars. It is also expected to stoke inflation. The depreciation is also expected to impact the country’s sovereign debt, of which a third is owed to foreign creditors. A stronger dollar may initially benefit families of overseas Filipino workers, as they can get more pesos for every dollar sent. But inflation may also eat into their purchasing power.

Analysts say the peso and other currencies were affected by news of hotter-than-expected US inflation, which fueled expectations that the US Federal Reserve would hike rates again, which would make the dollar even stronger. A poll of analysts expects the Fed to keep rates steady in its meeting this month, but is expected to hike rates again in December.

Source: news.abs-cbn.com