Peso Stabilizes at P61 Amid Oil Price Volatility

The Philippine peso is expected to hold at its current level of P61 against the US dollar this week, according to market analysts. The currency declined by 10.7 centavos on Friday to close at P61.45 versus the greenback from P60.343 on Thursday.

The decline was attributed to elevated global oil prices, which rose due to tensions in the Middle East and reduced expectations of a Federal Reserve rate hike next month. Brent crude futures rose to $87.68 per barrel, up 0.7% on the day, while US oil prices rose 0.3% to $81.49.

The Philippine central bank's policy meeting is scheduled for August 27, and market players are awaiting clearer evidence that inflation is moving sustainably lower. BSP Governor Eli M. Remolona, Jr. said that weak second-quarter economic growth relieves the pressure for monetary tightening, but they still need to see a more significant decline in inflation.

The peso weakened further on Friday due to concerns about the ongoing US-Iran conflict and its impact on oil prices. The US threatened to ramp up economic pressure on Iran, including extending a naval blockade, while Tehran called on the US to accept defeat.