Business

Philippine peso steady at P58 against US dollar, drags local bourse

 By Jeanne Michael Penaranda

MANILA — The  Philippine peso fell on Tuesday to a new low of P58.27 against the US dollar, dragging the local shares from the gains during previous day’s trading.

The peso maintained at P58 level to the US dollar on Wednesday when it closed at 58.19 to a dollar on from the previous day’s finish at 58.13.

It opened the day at 58.3 and traded between 58.09 to 58.3, bringing the weighted average of the day to 58.191.

Total volume of trade went up to US$1.38 billion from US$1.26 billion on Thursday.

Meantime, the local stock market ended the last trading day of the week in the negative territory, while the peso closed flat.

The Philippine Stock Exchange index (PSEi) shed 40.10 points to close at 6,619.89, while All Shares also went down by 13.80 points to 3,523.49.

Most sector indices joined the PSEi in the red territory, with Properties having the biggest loss of 2.39 percent, followed by Mining which went down by 1.72 percent.

The Service sector was the sole gainer, increasing by 0.48 percent

On Tuesday, the Philippine Stock Exchange index (PSEi) ended lower by 0.74 percent at 6,633.66, while All Shares declined by 0.36 percent to 3,535.77.

On the same day, the exchange rate  slipped to P58.27 to a US dollar, according to the latest data from the Bangko Sentral ng Pilipinas and the Bankers Association of the Philippines.

The Tuesday rate has been the lowest since October 2022, when the rate hit a record-low of P59 against $1.

The latest exchange rate is also higher than the P57.9 recorded on Monday.

In a statement, the Bangko Sentral ng Pilipinas (BSP) explained that other countries are also experiencing similar situation at present.

BSP Governor Eli Remolona said the central bank attributed the strengthening of the dollar to the “signaled delay” of cutting interest rates of the U.S. Federal Reserve.

“The BSP continues to monitor the foreign exchange market but allows the market to function without aiming to protect a certain exchange rate,” Remolona said in a statement.

“Nonetheless, the BSP will participate in the market when necessary to smoothen excessive volatility and restore order during periods of stress,” he added.

Remolona made the statement after the peso further depreciated and breached the 58 to a dollar level on Tuesday morning’s trading.

“The peso weakened beyond 58 to the US dollar today, in line with other currencies in the region,” he said.

“The dollar continued to strengthen as the Federal Reserve signaled delay in cutting interest rates,” he added.

Fed officials earlier said a rate cut will be on hold until inflation returns to their 2-percent target.

Remolona assured that the BSP continues to monitor the foreign exchange market but allows the market to function without aiming to protect a certain exchange rate.

“Nonetheless, the BSP will participate in the market when necessary to smoothen excessive volatility and restore order during periods of stress,” he said.

When the Philippine peso depreciates, overseas Filipino workers can send more money to their families in the Philippines due to favorable exchange rates. 

However, this also means that foreign goods and services become more expensive for Filipinos. 

Philstock Financials, Inc. research and engagement officer Mikhail Plopenio said in a PNA report investors’ worry over a weaker peso against the US dollar dragged the local bourse’s performance.

“The Philippine peso breached the P58-per-dollar mark, which has been the lowest in nearly two years. Also, the lack of strong positive leads weighed on the market,” Plopenio said.

Except for Services, which grew by 0.77 percent, the rest of the sectoral indices shed shares on Tuesday’s trading.

The biggest losses came from the Property counter, down by 1.28 percent; followed by Holding firms, down by 1.10 percent; Financials, down by 1.09 percent; Mining and Oil, down by 0.53 percent; and Industrial, down by 0.53 percent.

Decliners outpaced advancers at 99 to 86, with 48 counters left unchanged.

The peso last hit the same level on Nov. 8, 2022.

In a statement, BSP)Governor Remolona Jr. said the dollar strengthened after the Federal Reserve signaled to delay the easing of its monetary policy.

It kicked off the day weak at 57.97 from a start of 57.68 the previous day.

It traded between 57.97 and 58.28, bringing the average level for the day to 58.12 to the greenback.

Volume of trade jumped to US$1.62 billion from US$1.21 billion on Monday

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