Philippine Peso Falling Trajectory Defies Rate Hike Expectations

Philippine Peso Falling Trajectory Defies Rate Hike Expectations

(Bloomberg) — The Philippine peso is likely to sink to new lows against the dollar as the country’s outsized vulnerability to high energy costs offsets expected interest rate hikes, analysts said.

MUFG warns aggressive BSP rate hikes may not stop peso weakness

While the Bangko Sentral ng Pilipinas (BSP) is seen raising key borrowing costs by up to 100 basis points (bps) more should inflation worsen, MUFG Bank Ltd. warned that such hawkish adjustments may not be enough to prop up the underperforming peso.According to the Japanese financial giant, the challenge for the peso is that relief for the local currency may remain constrained as investors stay bearish due to the disappointing first-quarter gross…