Peso hits new record low for fourth straight day

The Philippine peso found a lower floor for the fourth straight day, closing at a yet another all-time weakest position at 57.135:$1 on Wednesday.

The local currency opened at the previous day’s closing of 57:$1, which was also its best showing, and weakened to as low as 57.33:$1 during intraday trading.

Since closing at 50.999:$1 at the end of 2021, the peso has so far this year lost P6.136 or 12 percent of its value against the greenback.

The peso continues to weaken, along with other currencies in the region and elsewhere across the globe, as prospects of further increases of interest rates in the United States—and thus greater profitability for US-bound investments—further firms up the US dollar’s rally.

The peso’s path so far this year “could lead to higher inflation and more aggressive local [Bangko Sentral ng Pilipinas] policy rate hikes to help stabilize both the peso exchange rate and overall inflation,” said Michael Ricafort, chief economist at the Rizal Commercial Banking Corp.

“However, in the fourth quarter of this year, the peso-dollar exchange rate could be supported by the expected seasonal increase in [overseas Filipinos] remittances, export sales proceeds that are converted to pesos especially during the holiday season,” he said. “These are based on consistent patterns seen in recent years and even decades.”