The peso falls to a new all-time low of P58.49 against the USD

THE Philippine peso fell to a new record low against the US dollar for the third straight day after closing at 58.49 pesos on Thursday.

The local currency lost 49 centavos against the US dollar from P58:1 on Wednesday after opening at P58.1 and trading between P58.0 and P58.5.

Volume on Thursday also hit $1.51481 billion, up from $1.05115 billion in the previous session.

This is also the ninth record close for the US dollar/peso exchange rate since the beginning of this year.

Since the beginning of 2022, the peso has depreciated by 7,491 pesos, or 14.7 percent, from 50,999 pesos by the end of 2021.

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The local currency fell to a new all-time low against the greenback after the US Federal Reserve (Fed) announced another large 75 basis point interest rate hike for the third straight day.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., told the Manila Times that the peso weakened after the benchmark yield on 10-year US Treasuries hit a fresh 11-year high of 3.62 percent on Sept. 11 would have. 21st, 2022.

For its part, ING Bank said the dollar continued to strengthen against other currencies following the US Federal Reserve’s hawkish move.

“As the Fed will hike another 100-125 basis points [one ppt (percentage point) to 1.25 ppt] This year, all of this points to an even stronger dollar,” ING Bank said.

Bangko Sentral ng Pilipinas Deputy Governor Francisco Dakila said during Thursday’s press conference on monetary stance that the peso’s movement is natural in a growing economy.

Dakila emphasized that the central bank, as the anti-inflationary agency, stands ready to “react” to FX if it poses inflationary risks.

“The movement of the peso is [a] natural consequence of the current account dynamics of a growing economy,” said Dakila.

The BSP hiked the country’s policy rate by 50 basis points to 4.25 percent on Thursday.

“The intent [of the interest rate hike] is not aimed at a certain level [of exchange rate]’ Dakila said.

“The priority is to bring inflation back into the target range,” he added.