THE peso hit a fresh record low of P62.90 against the dollar on Thursday and the benchmark stock market index plunged 2.2 percent to 5,610.39 amid pressures from a strong dollar, rising oil prices and domestic concerns.
The currency opened at P62.65 to $1 and traded as high as P62.90. Volume reached P1.449 billion, up from P1.208 million in the previous session.
The Philippine Stock Exchange index (PSEi), meanwhile, shed 126.30 points and slid back below the 6,700 level. The broader All Shares dropped 1.46 percent, or 46.44 points, to 3,145.55.
Union Bank chief economist Ruben Carlo Asuncion said the peso’s latest all-time low reflected a combination of persistent dollar strength and rising external price pressures.
“The US dollar continues to draw support from the Federal Reserve’s higher-for-longer policy stance and elevated Treasury yields, while oil prices above $100 per barrel have raised concerns over inflation and the country’s import bill,” he added.
On the domestic front, Asuncion said the surprise rise in September inflation to 7.2 percent raised expectations of more Bangko Sentral ng Pilipinas rate hikes.
“The recent decline in gross international reserves to just below $100 billion also contributed to concerns over the country’s external buffers,” he added.
“Moving forward, we expect the peso to remain volatile and generally biased toward weakness, with US rates, oil prices, geopolitical developments, and BSP (Bangko Sentral ng Pilipinas) policy signals likely to remain the key drivers of the exchange rate in the near term.”
Regina Capital Development Corp. head of sales Luis Limlingan, meanwhile, said the PSEi ended lower as selling pressure intensified amid rising crude oil prices and concerns over potential supply disruptions.
“Investors remained cautious as elevated oil prices could further weigh on inflation and economic growth,” he said.
Japhet Tantiangco, Philstocks Financial Inc. research manager, said sentiment was also pressured by mounting expectations of rate hikes from both the US Federal Reserve and the BSP.
Trading picked up, with net value turnover at P6.38 billion. Foreign investors were net sellers, posting P1.18 billion in net outflows.
All sectors ended lower with services falling the most by 4.86 percent.
The broader market ended with 112 decliners against 73 gainers and 67 unchanged issues.
