MANILA - The Philippine peso dipped to yet another all-time low against the dollar as it closed at P57.48 versus the greenback on Tuesday, according to data from the Bankers Association of the Philippines.

The peso weakened to as low as P57.5 in intraday trading, BAP data showed. Last Friday, the peso closed at P57.43 to a dollar.

Markets and central banks globally are anticipating another interest rate hike by the US Federal Reserve to tame inflation.

The Fed is set to start its 2-day meeting later on Tuesday, with many analysts expecting yet another aggressive rate hike.

The Bangko Sentral ng Pilipinas meanwhile is set to hold a policy-setting meeting on Thursday.

Interest rate hikes by the US Fed cause the dollar to rally, which in turn, lead to the depreciation of other currencies including the peso.

"[US] Inflation is still heading upwards. It’s very clear that the Fed will raise rates by at least 75-basis points and our expectation is that it will continue to raise rates by November, December and into next year," Moody’s Analytics Chief APAC Economist Steven Cochrane told ANC.

"The central bank [BSP] has 2 things to watch for, one is controlling inflation but then also the currency, this is where the conundrum that many central banks in the region are at, they need to manage the spread between interest rates with the US rates to try to avoid any significant capital outflows from Asia to the US," he added.

• Peso weakens to new record low, closes at P57.43 to $1
• Rate hikes: a double-edged sword for central banks

The BSP is widely expected to hike the country's benchmark interest rate on Sept. 22.

The policy rate is primarily adjusted to address surging inflation but it could also stabilize the currency, BSP Gov. Felipe Medalla earlier said.

• Markets drop again as traders brace for another big Fed hike

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