Peso pierces 54:$1 level
MANILA, Philippines — The peso shed 31.5 centavos to close at a fresh 3.5-year low of 54.065 yesterday from Friday’s 53.75 to $1.
The local currency opened stronger at 53.80 before losing steam and hitting an intra-day low of 54.105. Trading volume was heavy at $1.01 billion, from $962.5 million last Friday.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said this was the lowest level for the peso since closing at 54.08 to $1 on Oct. 15, 2018.
He cited the recent weakness in other ASEAN and Asian currencies after the large 75-basis-point rate hike by the US Federal Reserve on June 15, as well as signals from the Bangko Sentral ng Pilipinas (BSP) that it would jack up rates by 25 basis points on Thursday as a follow-up to the 25-basis-point hike last May 19.
The bank economist also cited the recent increase in the country’s external debt to a record $109.7 billion as of the first quarter of the year that translated to a nine-year-high debt-to-gross domestic product (GDP) ratio of 27.5 percent.
Ricafort also cited the jump in COVID cases to more than 600 per day.
According to RCBC, the next resistance level for the peso is at 54.325 to $1 recorded on Sept. 26, 2018.
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