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(From: Bangko Sentral ng Pilipinas web site)
The peso plunged 0.85 % or 45 centavos on Monday, June 20, to shut at 54.005.
The native foreign money’s depreciation towards its US counterpart to a recent three-year low follows the Federal Reserve’s most aggressive fee hike in almost three many years, propping up the greenback.
Final week, the US central financial institution hiked its key fee by 75 foundation factors, the most important enhance since 1994, in a bid to struggle multi-year excessive inflation stateside.
The plunging peso additionally provides stress on the Bangko Sentral ng Pilipinas to be extra aggressive in its fee hikes to stem the foreign money’s stoop.
A weak peso may make imports dearer for the Philippines, which is already grappling with excessive oil costs amid the Russia-Ukraine struggle.
The peso might proceed to depreciate versus the greenback this week on dovish hints from central financial institution officers forward of its overview and regardless of an aggressive fee hike by the US Federal Reserve.
The Financial Board will meet on Thursday to determine on its newest coverage determination.
Charge hikes normally assist mood the foreign money’s weak point by making native yields extra enticing to overseas buyers.
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