THE PESO slid to a record low on Thursday morning, March 19, breaching the 60-per-dollar mark as risk aversion tied to the Middle East conflict and a firmer US dollar weighed on the currency.
The peso opened at 59.9 and slumped to an intraday low of 60.4, its weakest level on record.
The dollar has strengthened amid a flight to safety, gaining further support after the US Federal Reserve on Wednesday held interest rates steady while raising its inflation forecast and warning of an “uncertain” outlook linked to the war in Iran.
In January, President Marcos indicated that he did not want the peso to weaken to 60 against the dollar.
As the conflict in the Middle East drags on, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday it was closely monitoring the impact of the conflict on Philippine inflation and the economy ahead of its next policy meeting on April 23.
“Price stability is the BSP’s main mandate. As such, the BSP is assessing the potential impact of higher oil price on the price of fertilizer, transport fares and inflation in general,” it said.
The BSP said it was also monitoring effects on the country’s current account — including remittances and trade — and financial markets.
“On the peso, the BSP stresses that it operates in the foreign exchange market to smooth excess volatility and maintain orderly conditions. This is consistent with a flexible exchange rate policy, with intervention limited to tempering large swings that could affect inflation rather than defending any specific level,” the central bank stated.
“As always, policy will be driven by data,” it added. (Ian Nicolas P. Cigaral © Philippine Daily Inquirer)
