Peso weakens to record low 63.52:$1

MANILA, Philippines — The peso weakened past the 63.50-per-dollar level yesterday, setting another record low even after the Bangko Sentral ng Pilipinas (BSP) delivered a larger-than-usual interest rate hike before the foreign exchange market closed.

Data from the Bankers Association of the Philippines showed the peso closed at 63.52 per dollar, weaker by 15.9 centavos from Wednesday’s previous record-low finish of 63.361.

The local currency opened at 63.31, briefly strengthened to 63.30, then weakened to as much as 63.545, its weakest intraday level on record. Trading volume rose by about 28 percent to $1.72 billion from $1.34 billion in the previous session.

Before the foreign exchange market closed, the BSP raised its key policy rate by 50 basis points to 5.50 percent. Higher interest rates can help support the peso by making peso-denominated investments more attractive, although analysts said external pressures remain strong enough to limit the currency’s response.

Ser Percival Peña-Reyes, director of the Ateneo Center for Economic Research and Development, said the peso continues to be weighed down by a strong dollar amid uncertainty over US interest rates, expensive oil due to Middle East tensions and persistent domestic demand for dollars.

He warned that the 64-per-dollar level has become a realistic near-term risk, noting that the peso would need to weaken by only around one percent from current levels to reach that threshold.

“If oil stays expensive and the dollar strengthens, 64 could be tested within days or weeks. Easing geopolitical tensions or a weaker dollar could delay it,” Peña-Reyes said.

Philippine Institute for Development Studies senior research fellow John Paolo Rivera likewise pointed to persistent dollar demand, elevated oil prices, global uncertainty and the widening balance of payments deficit.

Rivera said higher BSP rates could help stabilize the peso by making peso-denominated assets more attractive and narrowing the interest rate gap with the United States.