The Philippine peso closed lower against the US dollar Friday as investors sought the safety of the greenback after the Federal Reserve signaled that the high interest rate would stay longer than expected.
It lost 7 centavos to settle at 58.65 against the dollar, down from Thursday’s 58.58. The local currency has also depreciated by more than 3.6 percent since the start of the year.
The Bangko Sentral ng Pilipinas said the weakening of the peso was due primarily to broad US dollar strength following the release of strong key US economic indicators, prompting hawkish remarks from Fed officials.
Escalating conflict in the Middle East as well as lingering geopolitical tensions in the West Philippine Sea also contributed to the depreciation of the peso, the BSP said in the highlights of its Monetary Board meeting on May 16, 2024.