The Philippine peso extended losses against the US dollar, slumping to its lowest since October 2005.
The local currency shed 44 centavos to close at 55.67 Wednesday. It opened the day at 55.42, a big slide from its 55 start in the previous session.
The peso traded between 55.42 and 55.72, bringing the day’s average to 55.574.
Volume reached $1.25 billion, lower than the previous day’s USD1.29 billion.
Rizal Commercial Banking Corp.’s chief economist Michael Ricafort told the Philippine News Agency that the peso’s depreciation was partly due to the strengthening of the US dollar and fears of a US economic recession.
He said projections for further increases of the Federal Reserve’s key rates to help tame the four-decade high US inflation rate also contributed to investors’ worries.
Ricafort said these factors, however, are countered by the drop in oil prices in the international market to below $100 per barrel and the similar development for other commodities “as the markets already pricing in the risk of a possible US economic slowdown or even recession; thereby could help reduce the country’s imports of oil and other major global commodities.”
He said the rally in the local bourse also cushioned the negative impact on the peso.
Ricafort sees the peso trading between 55.50-55.75 on Thursday. (PNA)