Peso weakness temporary - BSP

The depreciation of the peso against the US dollar is only temporary due to the current market sentiment surrounding the US Federal Reserve, an official from the Bangko Sentral ng Pilipinas said.

- Keisha Ta-asan

In an online press briefing on Friday, BSP Senior Assistant Governor Iluminada Sicat said the peso weakness is only temporary as the dollar is buoyed by the monetary policy stance of the Fed, which may delay its policy rate cuts this year.

“We believe the current depreciation of peso is merely sentiment-driven,” she said. “(Eventually,) the direction or path of the foreign exchange rate will be determined largely by fundamental developments.”

The peso has been above the 58 to $1 level since late May. The local currency closed at 58.65 to $1 on Friday, down by seven centavos from its previous finish of 58.58 to $1.

Year to date, the peso has depreciated by 5.6 percent from its end-2023 close of 55.37 to $1. The local unit also hit a 19-month low of 58.79 to $1 on June 10.