MANILA: The Philippine peso fell to a record low against the dollar as higher oil prices put renewed pressure on the currency.
The peso slid as much as 0.3% to 61.995 to the US currency, weakening past the previous all-time low of 61.850 set in July.
The Philippine currency is vulnerable to swings in energy costs as the nation imports almost all its oil requirements. Brent crude has jumped more than 5% over the past four days as US president Donald Trump insisted there were no talks ongoing with Tehran to resolve the Middle East conflict.
The peso has now lost more than 5% this year, making it one of Asia’s worst-performing currencies over the period. The central bank intervened in foreign-exchange markets last month to support the currency, governor Eli Remolona said at the time.
Dollar-peso made all-time highs driven by a combination of factors such on stronger US dollar, higher crude oil and renewed geopolitical tensions,” said Wee Khoon Chong, senior Asia Pacific market strategist at BNY in Hong Kong.
The central bank “will probably be biased to hike rates again to defend the peso, but the impact of rates hikes to curb FX depreciation is diminishing,” he said.
The Philippines will not spend all its reserves to defend the peso, and the currency’s weakness is due to a strong dollar, president Ferdinand Marcos Jr said last week. The nation’s foreign-exchange reserves have fallen almost 7% this year to US$103 billion.
