The Philippine peso continued to decline versus the greenback Tuesday, sinking to its 17-year low amid a growing trade deficit.
The peso depreciated to 56.37 against the US dollar, its weakest since November 5, 2004 when it closed at P56.375. Its intra-day low was at 56.45. Volume jumped to $1.39 billion from $804.6 million.
Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort attributed the peso’s depreciation to a “record trade deficit on a monthly basis at -$5.679 billion and the stronger US dollar.”
He said the scheduled release of the US June 2022 consumer price index (CPI) on Wednesday, along with expectations for further hikes in the Federal Reserve’s key rates, also contributed to the risk-off sentiments.
“It is interesting to note that back in 2004-2005, the high was capped/limited at 56.40 levels for about two years,” Ricafort said.
He expects the peso to trade between 56.25 to 56.45 to the US dollar on Wednesday. (PNA)