MANILA - The Philippine peso fell to a new record low for the fourth straight day on Friday, closing at P58.50 against the US dollar.
Friday's close is worse than Thursday's P58.49.
The US dollar rallied, which resulted in the depreciation of other currencies including the peso, after the US Federal Reserve announced another 75-basis point big time rate hike to cool down inflation.
The Bangko Sentral ng Pilipinas also raised the country's interest rate on Thursday by 50-bps to 4.25 percent, which it reiterated was meant to address inflation and not to target a certain level of foreign exchange rate.
But the lower increase in the benchmark rate could influence the peso movement, Miko Sayo, stockbroker and founder of fintech firm focused on trading Tsupitero.com, told ANC.
"With the Fed increasing the rates by 75 basis points and us only increasing by 50-bps it increases the interest rate differential between our market and theirs, so that would put more pressures on the peso," Sayo said.
"If I’m not mistaken, the central bank’s mandate is to control inflation. Foreign exchange is not technically their main priority. I think that’s what they’re thinking right now," he added.
The dollar is widely expected to continue overperforming after the US Fed signaled that it would implement more rate hikes in the near term and that rates would be kept elevated up to 2024.
Several analysts have said the peso sinking to P60 to a dollar is possible.
"I wouldn’t be surprised if we see 60 bucks soon," Sayo said.
Meanwhile, the National Economic and Development Authority on Friday said the peso depreciation against the dollar is likely temporary.
The influx of remittances during the holiday could also prop up the currency, NEDA said.
Peso-dollar closing rates:
Sept. 16 = P57.43
Sept.19 = P57.40
Sept. 20 = P57.48
Sept. 21 = P58.00
Sept. 22 = P58.49