Cheyenne Suarez

Photo illustration of US dollar to PH peso exchange in this photo taken on September 30, 2022. Gigie Cruz, ABS-CBN News

Article (news)

Photo illustration of US dollar to PH peso exchange in this photo taken on September 30, 2022.

Arthur Fuentes

Benise Balaoing

ABS-CBN News

MANILA (UPDATE) - The Philippine peso again hit a historic low of P59 to the dollar at the close of Thursday&#x27;s trading, which was its weakest level in more than two years.The last time the local currency was this low was on October 17, 2022.The Bangko Sentral ng Pilipinas earlier said that the peso&#x27;s depreciation was not because of it weakness but because the US dollar was strong, noting that other currencies had also depreciated versus the dollar.On Wednesday, the US dollar further firmed up against other currencies as analysts said the US Federal Reserve was not likely to make another interest rate cut next month.This was after a Fed official said the US central bank should be careful not to cut rates &quot;too quickly&quot; and risk reigniting stubborn inflation.Adrian Yu, Head of Institutional Sales at COL Financial also said the dollar&#x27;s strength was making other currencies look weak.<div><iframe width="640" height="360" src="https://www.youtube.com/embed/QQ_xPo9tCi4?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe> </div>&quot;Well, the weakness of the peso wasn&#x27;t just the weakness of the peso. I think we&#x27;ve seen it for all emerging market currencies. It was probably more the strength of the US dollar,&quot; Yu said in an interview with ANC.He said that after the election victory of Donald Trump, &quot;markets were trading into the US dollar quite heavily, thinking that rates would be more sustained, more elevated.&quot;Another analyst meanwhile warned that if the peso continues to depreciate, it will affect inflation as the country imports a lot of goods that have to be paid for in dollars. Japhet Tantiangco, Research Manager at Philstocks Financial noted that the country has been banking on agricultural imports to slow down inflation. &quot;Given our heavy dependence on imports, the depreciation of the local currency may, you know, may have inflationary poses inflationary risks towards the economy,&quot; Tantiangco said in an interview with ANC.The weak peso has also discouraged investors from the Philippines&#x27; financial markets, which partly explains the heavy foreign selling that the local stock exchange has seen in the last few weeks, he said.Tantiangco said that if the BSP implements more aggressive rate cuts next year, this may see the peso further weaken. &quot;Aside from that, we&#x27;re also looking into other factors, like, you know, our balance of trade, our balance of payments. We posted a deficit, and I believe this is also contributing to the weakness that we&#x27;re seeing right now. Moving forward, if you see sustained deficits and rebalance of payments, then you know the weakness in the peso is also expected to continue,&quot; he said.Meanwhile,  Yu also said a seasonal increase in remittances from overseas Filipinos in time for the holidays may also bring some strength back into the peso.&quot;We should, we should see a seasonally strong period. So hopefully this should be the catalyst in the near maybe month or two that we could see some strength back into the peso as we end the year,&quot; Yu said.Former Presidential economic adviser and current Albay Representative Joey Salceda said he also expects OFW remittances in December to keep the peso from going into freefall towards the end of 2024. &quot;I also see that some of Trump’s aggressive anti-import rhetoric is strengthening the dollar and is being priced in,&quot; Salceda said in a statement. But Salceda also cautioned the BSP &quot;against defending the peso excessively, even if the decline continues through 2025.&quot; &quot;If OFW remittances aren’t enough to provide support to the trend this December, this will likely persist, and most peso-bolstering efforts will be a waste,&quot; he added.

The Philippine peso again hit a historic low of P59 to the dollar at the close of Thursday's trading, which was its weakest level in more than two years.

The Philippine peso again hit a historic low of P59 to the dollar at the close of Thursday's trading, which was its weakest level in more than two years.

Philippine peso again hits historic low of P59 to US dollar

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Philippine peso again hits historic low of P59 to US dollar

Arthur Fuentes,

Benise Balaoing,

ABS-CBN News

Published November 21, 2024 05:07 PM PHT

|

Updated November 21, 2024 08:57 PM PHT

Read More:

ABSNews

peso dollar

forex

exchange rate

peso depreciation

US dollar

BSP

Federal Reserve

COL Financial

Philstocks

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