Philippine peso weakens to record low as oil prices extend gains
The peso slides as much as 0.3% to 61.995 per US dollar, weakening past the previous record low of 61.850 set in July.
MANILA: The Philippine peso plummeted to a record low against the US dollar due to the rise in oil prices, making it one of Asia's worst-performing currencies this year. The peso experienced a slide of up to 0.3%, reaching 61.995 to the dollar, surpassing the previous all-time low of 61.850 set in July. The vulnerability of the Philippine currency to fluctuations in energy costs is due to the country importing almost all of its oil.
Brent crude prices surged more than 5% over the past four days as US President Donald Trump confirmed there were no ongoing negotiations with Iran to resolve the Middle East conflict. The peso has lost more than 5% of its value this year, ranking among Asia's weakest currencies.
The central bank intervened in foreign-exchange markets last month to safeguard the currency, as stated by Governor Eli Remolona. The dollar-peso reached all-time highs due to a combination of factors, including a stronger US dollar, higher crude oil prices, and renewed geopolitical tensions, according to Wee Khoon Chong, a senior Asia Pacific market strategist at BNY in Hong Kong.
The central bank might raise interest rates to defend the peso, but the impact of such hikes in curbing foreign-exchange depreciation is gradually diminishing, he added.
President Ferdinand Marcos Jr. assured that the Philippines would not exhaust all its reserves to protect the peso, and the currency's decline is primarily attributed to the strong dollar. Foreign-exchange reserves in the nation have dwindled by nearly 7% this year, amounting to US$103 billion.
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- Philippine peso weakens to record low as oil prices extend gains freemalaysiatoday.com
