The peso drops to a new all-time low of P58.49 against the US dollar

The Philippine peso fell to a new record low against the US dollar for the third consecutive day after closing at P58.49 on Thursday.

The local currency lost 49 centavo against the US dollar from P58:1 after opening at P58.1 and trading between P58.0 and P58.5.

Thursday’s trading volume was $1.51481 billion, up from $1.05115 billion in the previous session.

This is also the ninth highest record closing rate of the USD/Peso exchange rate since the beginning of this year.

Since the start of 2022, the peso has depreciated by P7.491, or 14.7 percent, against P50.999 by the end of 2021.

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The local currency fell again to a new all-time low against the dollar after the US Federal Reserve (Fed) announced a 75 basis point rate hike for the third time in a row.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., told The Manila Times that the peso weakened after the 10-year US Treasury yield hit a new 11-year high of 3.62% on September 21, 2022.

For its part, ING said the dollar strengthened against other currencies after the US central bank’s hawkish move.

“With the Fed set to raise another 100-125 basis points [one ppt (percentage point) to 1.25 ppt] This year, all of this points to a stronger dollar.”

Bangko Sentral ng Pilipinas Deputy Governor Francisco Dakila explained during the monetary policy stance press conference on Thursday that the peso’s movement is normal in a growing economy.

Douqaila stressed that the central bank, as an inflation targeting agency, is ready to “respond” to foreign exchange if it poses inflation risks.

piezo movement [a] A natural consequence of the current account dynamics of a growing economy.”

On Thursday, BSP raised the country’s benchmark interest rate by 50 basis points to 4.25 percent.

“Intention [of the interest rate hike] Not to target a specific level [of exchange rate]Duqila said.

“The priority is to bring inflation back to the target range,” he added.

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