The peso tumbled to an all-time low of 59 against the US dollar for the fourth time this month, on the financial markets’ expectation of further rate hikes by the US Federal Reserve in November.
Data from the Bankers Association of the Philippines showed the local currency closed at 59 a dollar Monday, weaker than 58.935 on Friday. Trading volume reached $524.9 million, down from $542.8 million on the previous trading day.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said in a report the relatively weaker peso could increase the possibility of further local policy rate hikes and more intervention in the local foreign exchange market by the Bangko Sentral ng Pilipinas.
BSP Governor Felipe Medalla had said local monetary authorities would not allow excessive movements in the peso-dollar exchange rate.
Medalla said in the annual reception for the banking community the BSP had been “very active” in the foreign exchange market.
“We will not allow excessive changes in the exchange rate…,” he said. “There are so many other things happening right now… It is very fluid but we hope the dollar will weaken.”
The country’s widening trade deficit also weighed on the peso this year, as monthly merchandize imports are now double the exports mainly on higher oil prices.
Data from the Department of Energy showed that total oil imports reached $9.931 billion in the first half, up by 115.4 percent from $4.6 billion a year ago, as volume increased 12.702 billion liters from 11.302 billion liters.
The country’s net oil import bill, or the difference between oil exports and imports, also soared 132.9 percent in the first six months to $9.705 billion from $4.166 billion a year earlier. Oil exports amounted to only $226.57 million in the six-month period. Julito G. Rada and Alena Mae S. Flores