MANILA, Philippines — The Philippine peso on Wednesday touched the P53-per-dollar level amid expectations that the Federal Reserve will lift interest rates.
The local unit plunged to P53 against the greenback on Wednesday as it resumed trading following the Independence Day holiday on Tuesday. The peso slumped to a 12-year low of P52.95 against the dollar last Monday.
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Sought for comment, Luis Limlingan of Regina Capital Development Corp. said all eyes are on the Fed as it is expected to raise key rates this week following a similar move in March.
“Several factors: the net foreign selling, anticipation of the Fed fund rate hike later, and the possibility that a statement later will implement a four hikes over three this year,” Limlingan said.
The Federal Reserve resumes a two-day meeting on interest rates later Wednesday. Investors expect the central bank to raise its benchmark rate by a quarter of a percentage point to a range of 1.75-2 percent.
However, investors' attention will focus more on how many additional rate hikes Fed officials may do this year.
DBS Bank Ltd. of Singapore sees the peso depreciating further to 54 to $1 by the end of 2018 on the back of accelerating inflation and widening trade gap. — Ian Nicolas Cigaral with The Associated Press