Peso may continue to shrink vs. dollar: economist

ABS-CBN News

Posted at Sep 23 2022 08:47 AM | Updated as of Sep 23 2022 04:44 PM

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MANILA – The Philippine peso may shrink further against the US dollar, an economist said Friday, after the currency fell to yet another record low following the Federal Reserve's latest big time rate hike.

Economist Calixto Chikiamco said he expects the peso to continue to depreciate as the Fed signals more increases in interest rates.

“Kasi ang Estados Unidos eh, yung Federal Reserve are trying to fight the inflation ‘no, at sini-signal nila na mas tataas pa nila ang interest rates in the coming months para masugpo ang inflation. Pag everytime na magtataas sila ng interest rates, eh siyempre, mas hihina pa rin ang piso,” he explained.

(The US Federal Reserve is trying to fight inflation, and they are signaling more interest rate hikes in the coming months. Every time they raise rates, the peso can weaken further.)

“Unless sumabay tayo diyan,” he said.

(Unless we hike rates too.)

The Bangko Sentral ng Pilipinas on Thursday raised the country's benchmark interest rate by 50-basis points to 4.25 percent.

Chikiamco stressed, however, that the peso is not the only currency that is weakening against the dollar.

“Maaaring until huminto ang US Federal Reserve sa pagtaas ng kanilang interest rates, eh makikita natin ang general direction ay ang paglakas ng US dollar at paghina ng piso. At hindi lang naman ang piso ang hihina, palagay ko, lahat ng currency, whether that is British pound or Euro, eh hihina rin,” he added.

(Until the US Federal Rserve stops raising interest rates, we see the dollar strengthening and the peso weakening. And it's not just the peso, I think the British pound or Euro will depreciate as well.)

--TeleRadyo, 23 September 2022