Philippine Peso Hits 17-Month Low Against US Dollar

The Philippine peso has reached a new 17-month low, with its value falling to P57.78 against the US dollar. This marks a significant depreciation from Wednesday’s rate of P57.55, setting a record low since November 10, 2022, when it stood at P58.19.

The decline in the peso’s value is attributed to robust economic data from the US, where there has been a reported expansion in new orders for American-made capital goods in March. Additionally, the peso’s downward trajectory was accelerated by a surprise interest rate hike by Indonesia’s central bank, which raised rates by 25 basis points to 6.25%, a seven-year high, in an attempt to bolster the rupiah against the dollar.

Security Bank Corp.’s chief economist, Robert Dan Roces, highlighted these developments, pointing to the US Durable Goods data and Indonesia’s policy adjustment as key drivers of the peso’s rapid depreciation. Similarly, Michael Ricafort of Rizal Commercial Banking Corp. noted the weakening of other currencies against the dollar, including the Japanese yen, which reached its lowest level since June 1990.

The Bangko Sentral ng Pilipinas (BSP) Governor, Eli Remolona, has commented on the situation, emphasizing that the peso’s decline reflects the dollar’s overall strength rather than inherent weakness in the Philippine currency. He assured that the BSP is closely monitoring the market to manage any potential disruptions and excessive volatility.

As the peso navigates these challenging economic waters, market observers and the central bank remain vigilant, ready to respond to further developments that could impact the currency’s stability.