Peso sinks to record low 61.888 vs dollar

MANILA, Philippines — The peso sank to a fresh record closing low yesterday as investors weighed rising domestic inflation risks and remained cautious ahead of new signals on the outlook for US interest rates.

Data from the Bankers Association of the Philippines showed the peso closed at 61.888 to $1, 23.80 centavos weaker than Wednesday’s 61.650 finish. The latest close surpassed the previous record low of 61.847 posted on July 24.

A trader said the peso came under pressure after the Bangko Sentral ng Pilipinas (BSP) raised its inflation outlook for 2027 due to risks from the anticipated El Niño phenomenon and wage increases.

The trader also said the local currency could remain weak as investors also turn their attention to incoming US monetary policy signals.

“The local currency might remain weak on market caution ahead of Fed chair Kevin Warsh’s remarks on the Jackson Hole Symposium,” the trader said, adding that the peso could trade between 61.75 and 62 per dollar in the near term.

The peso’s renewed weakness keeps imported inflation risks in focus. During a Senate hearing, BSP Governor Eli Remolona Jr. said a weaker currency makes imported goods more expensive, but the speed of depreciation determines how strongly exchange rate movements feed into consumer prices.

“If the peso weakens sharply, the exchange rate has a stronger impact on inflation. But if the movement is gradual, the impact on inflation is not as significant. So what we do is manage sharp movements in the exchange rate.”