The Philippine peso shifting toward its all-time low. Hence the nation’s central bank is planning to cut the interest rate further and face slowing down the economic growth.
Goldman Sachs Group Inc., Barclays Plc, and Fitch Solutions visit the peso testing 60-per-dollar mark by midyear. Hence BS Group Holdings Ltd. predicts a downfall of 60.8. The currency is now closed at 58.310 per dollar on Friday. This is not far off from the historic 59 per dollar marking as it hits in December.
Asian markets are reeling from the effect of the red-hot dollar as investors weigh the impact of Donald Trump’s presidency in the US. The peso is the worst-hit currency, with a 2.4% declining rate after Bangko Sentral ng Pilipinas started to cut down their interest rates.
BSP also has intervened in the foreign exchange market to limit the currency’s volatility. It’s also lowered the rates by 75 based on points since August. They are ready to cut the rates, but potentially it’s also slower pace due to geopolitical tensions and US policy. BSP’s next decision will be published on Feb. 13.
Shi Cheng Low, an analyst at BMI said that breaching the 60 per dollar mark
“remains a very real possibility and much depends on how Trump’s policies will shape up,”
“BSP intervention in the FX market will prove ineffective.”
Additionally, BSP also going to ease and support the economy that will, coupled with trade jitters stand to exacerbate the downtrend. The Philippines missed its goal of at least 6% growth last year. The nation last month expanded its projected growth ranges for 2025 to 6%-8% for President Trump’s new US trade policy.
Philippine economy’s domestic focus, Audrey Ong, a strategist at Barclays stated
The peso
“remains vulnerable, but to a relatively lesser extent than many other Asian currencies,”
“Less robust external metrics could pose a risk to the peso.”