- The Philippine peso weakened to a fresh record-low close of ₱62.90 per US dollar as expectations of higher US interest rates strengthened the greenback, while the country’s foreign reserves fell below $100 billion for the first time in three years.
- The peso lost 15 centavos on Thursday, breaking its previous record-low close of ₱62.86 set on September 14, according to the Bankers Association of the Philippines.
- Trading volume rose to $1.4 billion from $1.2 billion in the previous session.
The Philippine peso weakened to a fresh record-low close of ₱62.90 per US dollar as expectations of higher US interest rates strengthened the greenback, while the country’s foreign reserves fell below $100 billion for the first time in three years.
The peso lost 15 centavos on Thursday, breaking its previous record-low close of ₱62.86 set on September 14, according to the Bankers Association of the Philippines.
Trading volume rose to $1.4 billion from $1.2 billion in the previous session.
Reuters reported that the dollar climbed toward an 18-month high after minutes from the US Federal Reserve’s latest meeting showed policymakers remained concerned about inflation, supporting expectations of higher interest rates.
Foreign reserves fall to three-year low
The Bangko Sentral ng Pilipinas (BSP) reported that gross international reserves (GIR) declined 8.3% year on year to $99.99 billion in September, the lowest level since September 2023.
The amount also fell short of the BSP’s revised year-end target of $104 billion, which was lowered from $111 billion amid the impact of the US-Iran war.
Reserves help the country pay for imports and foreign debt obligations, while providing a buffer against external economic shocks.
Falling gold prices and peso support weigh on reserves
The BSP partly attributed the decline to lower gold prices, which reduced the value of its gold holdings by 7% from the previous month to $17.8 billion.
Foreign currency and deposits dropped 17% to $1 billion, while offshore investments, the largest component of reserves, fell to $76.5 billion, their lowest level since March 2020.
The central bank also cited its occasional intervention in the foreign exchange market to temper the peso’s decline as a factor behind the reduction.