Philippine Peso Rises After Hot Inflation Data
The Philippine peso rose to around 63.2 per US dollar on Thursday, supported by stronger-than-expected inflation data that reinforced expectations of further monetary tightening. Annual headline inflation accelerated to 7.8% in October from 7.2% in September, exceeding forecasts of 7.6% and marking its highest level since February 2023. Core inflation also rose to 5.4% from 4.8%. The acceleration strengthens the case for further Bangko Sentral ng Pilipinas (BSP) rate hikes as policymakers seek to contain price pressures and anchor inflation expectations. The central bank has already raised rates four times this year. Meanwhile, a weaker greenback following Democrats' victories in both chambers of the US Congress provided additional support. Nevertheless, elevated global oil prices continue to pose risks by adding to domestic inflation and increasing the country's import bill and demand for foreign currency, leaving the peso vulnerable despite its latest gains.
The Philippine peso rose to around 63.2 per US dollar on Thursday, supported by stronger-than-expected inflation data that reinforced expectations of further monetary tightening. Annual headline inflation accelerated to 7.8% in October from 7.2% in September, exceeding forecasts of 7.6% and marking its highest level since February 2023. Core inflation also rose to 5.4% from 4.8%. The acceleration strengthens the case for further Bangko Sentral ng Pilipinas (BSP) rate hikes as policymakers seek to contain price pressures and anchor inflation expectations.
The central bank has already raised rates four times this year. Meanwhile, a weaker greenback following Democrats' victories in both chambers of the US Congress provided additional support. Nevertheless, elevated global oil prices continue to pose risks by adding to domestic inflation and increasing the country's import bill and demand for foreign currency, leaving the peso vulnerable despite its latest gains.