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| The USD has emerged stronger than most regional currencies, including the peso |
The Philippine peso sank to a new record low Tuesday, closing at 59.22 against the US dollar, amid expectations of a further rate cut by the Bangko Sentral ng Pilipinas.
Because of the HKD peg to the USD, the corresponding exchange rate with the HKD is now Php7.61 to HK$1.
This beat the previous record for the drop of Php59.17, posted on Nov. 12.
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The local currency dipped by 28.5 centavos from the Friday finish of 58.935, data from the Bankers Association of the Philippines show.
The peso opened weaker on Tuesday at 59.08, and posted an intraday best at 59.07, before closing at the record low of 59.22.
For the past year, the local currency has depreciated by 2.32% from its Php57.845 finish on Dec. 27, 2024.
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The Philippine peso dropped along with most regional currencies ahead of the US Federal Reserves’ policy meeting, and the possible consequence of a rate cut by the BSP.
Reports from the Philippines indicate the BSP would likely announce a fifth straight drop tomorrow, to bring the policy rate to at least 4.5%, the lowest since September 2022.
Last week BSP Governor Eli M. Remolona, Jr. hinted at a further cut, citing weakening growth prospects for the economy.
Analysts say that while remittances are expected to soar over the holiday season, this will be tempered by a strong US dollar and a weak local confidence, resulting in higher costs of imports and debt repayments.
Forecasts are mixed, with analysts predicting either a slight rise for the peso at 59.05 and 59.10, or a further dip to between 59.30 and 59.35 within the week.
