The Philippine peso continued to lose ground against the US dollar on Thursday, even as the Monetary Board (MB) again jacked up the policy rate to address the expected further quickening of inflation.
The local currency closed spot trading at 55:888:$1, weaker by 2.8 centavos than in the previous trading day when it was pegged at 55.86:$1.
This was the ninth straight trading day that the peso depreciated, starting at 55.20:$1 on Aug. 5.
The MB raised the Bangko Sentral ng Pilipinas' overnight borrowing rate by 0.5 percentage point to 3.75 percent to address rising inflation as well as the depreciation pressures on the peso.
MB Chair and BSP Governor Felipe Medalla noted that the depreciation of the peso was an added factor in rising inflation expectations.
In their latest monthly market commentary, First Metro-UA&P Capital Markets Research said the peso may have a little respite from its recent weakness in the coming months as the seasonal peak of remittances from overseas Filipinos approaches.
However, First Metro-UA&P said the continually aggressive policy rate hikes by the United States Federal Reserve would maintain pressure on the peso.
"The external sector will remain challenged since imports may shift from oil to food while exports may respond positively to the peso depreciation only starting Q4 [in the fourth quarter]," the group said.
"Inflation will likely average 6 percent in the second semester, assuming only a minor further slide in crude oil prices and put some brakes on consumer spending," First Metro-UA&P said.
According to ING Bank senior Philippines economist Nicholas Mapa, sugar prices could keep inflation high.
"Sugar accounts for only one percent of the consumer price index basket of goods, but the pricey sweet stuff could also nudge up the prices for non-alcoholic beverages (which account for 3 percent of the CPI) and restaurants (9.5 percent of CPI)," Mapa said.
Data from the Philippine Statistics Authority (PSA) show that the growth rate of prices in the "sugar, confectionery and desserts" basket, which include refined sugar, kicked up 17.6 percent in July.
The PSA said this sub-basket was among the biggest contributors—along with the sub-groups of meat and fish —to inflation in food and non-alcoholic beverages in July.
Inflation for the sweets basket has been rising month after month since January when it was pegged at 2.8 percent.
- Peso weakens vs dollar amid higher US Treasury yields
- After losing ground for decades, Camp Ellis feeling helpless
- Ash vs. Evil Dead Is A Better Show Than The Walking Dead But None Of You Ingrates Watched It
- USD/CAD - Canadian Dollar Edges Up Ahead Of Canadian GDP - PowerShares DB USD Bull ETF (NYSEARCA:UUP)
- Dow drops on industrials, extends losing streak to five days
- MI vs RCB, IPL 2018 preview: Rohit Sharma, Virat Kohli battle for survival
- Your Turn: After 20 years and millions of dollars, how did Arizona teacher pay get worse?
- Spec showdown: Moto G6, G6 Plus, G6 Play vs Moto G5 series
- A Real-Life Mexican Standoff - iShares Mexican Peso ETF (Pending:MXNS)
- Timberwolves' Karl-Anthony Towns wins round three vs. Rockets' Clint Capela
- Detroit Tigers' Francisco Liriano loses no-hitter vs. Royals in sixth
- Dollar Licks Its Wounds In Currency War - PowerShares DB USD Bull ETF (NYSEARCA:UUP)
- IPL 2018 Score RR vs MI Cricket Score: K Gowtham leads Royals win, Mumbai Indians lose by 3 wickets
- IPL 2018, RCB vs KXIP: AB de Villiers half century guides RCB to 4 wicket win vs KXIP
- Wolves vs Birmingham City live score and goal updates
- Rupee sags to 13-month low of 65.80 vs USD on crude shock
- UC vs. Harvard: Round 2 in CRISPR fight
- Detroit Tigers rally falls short in 9th, lose to Tampa Bay Rays, 3-2
- Rewinding Auburn's 7-5 series-clinching win vs. Mississippi State
- Detroit Tigers lose to Baltimore Orioles today, 5-3
Peso loses ground vs US dollar have 615 words, post on business.inquirer.net at August 19, 2022. This is cached page on Business News. If you want remove this page, please contact us.