[MANILA] The Philippine peso fell past the key psychological level of 59 per US dollar to an all-time low, putting pressure on the central bank to defend the currency.
The peso dropped 0.5 per cent to 59.2 per US dollar on Tuesday (Oct 28), the weakest on record.
Traders are closely watching for potential moves from Bangko Sentral ng Pilipinas (BSP) amid pledges to intervene more forcefully during periods of extended peso weakness. The currency is the worst performer in South-east Asia this month.
“I expect BSP to come in and signal more strongly to the market as we move past the 59-level,” said Michael Wan, a currency strategist at MUFG Bank in Singapore. “If it continues to move fast, I expect the markets to test 60 levels.”
A member of the central bank’s Monetary Board on Monday said that borrowing cost will likely be lowered by 25 basis points when it meets in December, with more reductions expected in 2026.
Bangko Sentral ng Pilipinas unexpectedly cut its benchmark interest rate in early October and warned of a deteriorating economic outlook.
Allegations over the widespread misuse of billions of US dollars for flood-control projects have weighed on growth prospects and rattled investor confidence. Foreign funds have net sold US$79 million of the nation’s equities in October, poised for the biggest monthly outflow since May.
The benchmark stock index is hovering close to its lowest since April, in contrast to gains in broader Asia that pushed a regional gauge to a record high. BLOOMBERG
