Peso weakens back to 56:$1 level

MANILA, Philippines — The peso slumped further against the dollar yesterday, piercing the 56 to $1 level, amid the volatility in the foreign exchange (forex) markets due to developments abroad.

The local currency depreciated by 27.5 centavos to close at 56.245 to $1 from Monday’s 55.97 to $1. The last time the peso closed at the 56 to $1 level was on Sept. 12, when it hit 56.20 to $1.

The peso opened weaker at 56.05 versus the greenback. It hit an intraday-best of 55.97 before losing steam to reach its worst showing at 56.33.

Trading volume climbed by 29.9 percent to $1.8 billion from $1.38 billion last Monday.

Security Bank chief economist Robert Dan Roces said markets are seeing local demand for dollars as the third quarter ends.

“This may be seasonal, but the forex space remains volatile given offshore developments. We do expect the peso to strengthen in the near-term though, as remittance inflows are poised to support,” he said.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso weakened as global crude oil prices corrected to new three-week highs amid increased tensions between Israel and Hezbollah posing risk of a bigger war, the biggest in nearly two decades.

The peso also weakened after some bargain-hunting by some local importers amid the seasonal increase in importation activities in the third quarter, in preparation for the seasonal increase in local and export sales/demand in the fourth quarter, he said.