Peso slides to 16-year low of 54.985 vs dollar

The peso depreciated further to 54.985 against the greenback, its lowest in more than 16 years or since October 27, 2005.

It opened the trade at 54.65, a big drop from its 54.4 start in the previous session, trading between 54.999 and 54.6. This brought the day’s average to 54.839.

Volume reached $1.4 billion, higher than Thursday’s $1.06 billion.

Rizal Commercial Banking Corp. chief economist Michael Ricafort partly attributed the continued weakening of the peso to the Bangko Sentral ng Pilipinas’ second 25 basis point increase in key interest rates.

Monetary authorities raised interest rates to fight inflation.

He said indication for additional rate hikes by both the BSP and the Fed “increased the attractiveness/allure of the US currency versus other major global/Asian currencies with higher short-term US interest rate returns, thereby leading to a stronger US dollar story vs. major global/Asian/ASEAN currencies in recent weeks/months.”

Ricafort forecasts the peso’s next resistance level at 55 against the US dollar. (PNA)