The Philippine peso dropped to a record as overseas investors cut holdings of the nation’s equities and the dollar rallied.
(Bloomberg) — The Philippine peso dropped to a record as overseas investors cut holdings of the nation’s equities and the dollar rallied.
The Philippine currency weakened as much as 0.6% in early Friday trade to 56.76 per dollar, an all-time low in data compiled by Bloomberg going back to 1993. It has now dropped 10% this year.
The peso is under pressure as overseas investors have sold a net $1 billion of Philippine equities this year. Emerging-market currencies are also weakening across the board as Federal Reserve’s interest-rate hikes bolster the dollar, spurring central banks to drain hundreds of billions of dollars from their reserves to slow the declines.
The less hawkish stance adopted by Philippine policy makers is adding pressure on the currency. Bangko Sentral ng Pilipinas is more likely to deliver one or two quarter point rate increase for the rest of the year, Governor Felipe Medalla said last month, after raising the key rate by 50 basis points at the August meeting.
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