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MANILA, Philippines – The Philippine peso could temper its weakness should the Bangko Sentral ng Pilipinas (BSP) decide to further raise interest rates, MUFG said, though it noted that the appreciation would still depend on external developments.
In a note, the bank said the peso, Thai baht and Korean won have led regional losses since the last meeting of the US Federal Reserve, which kept rates unchanged this month amid above-target inflation stateside.
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“The Philippine peso, despite offering relatively higher yields, has not been sufficiently insulated from depreciation pressures given elevated US rates,” MUFG said.
