Dubai: UAE expats looking to remit more Philippine pesos back home are expected to continue getting favourable rates, if not better, in the weeks to come.
Against the UAE dirham, the Philippine peso was at 15.21, down from 15.18 earlier in the day. Meanwhile, the currency was at 55.87 versus the US dollar. Check the latest forex rates here.
Earlier this month, the Philippine currency hit an 18-year low against the US dollar and the UAE dirham on July 12. This is when the peso exchange rate matched the record low seen since October 13, 2004, a time when the high was limited at 56.40 levels for about two years.
The Philippine peso depreciated by over 6 per cent against a very strong US dollar from June 10, when the peso slid down to 53:$1, as of last week.
Weakness in the currency's value against the US dollar will be automatically reflected in its exchange rate with the UAE dirham as the UAE currency is pegged to the dollar.
This is why the slide gives millions of overseas Filipino workers earning in dollars, or a currency pegged to the dollar like the UAE dirham, more value in the local currency.
The Philippine peso still hovers near all-time lows against both currencies and down over 10 per cent since January.
Dubai-based forex analysts evaluate how the predicted US central bank interest rate hike this week will nearly negate the Bangko Sentral ng Pilipinas (BSP) move on July 14, which brought the key policy rate to 3.25 percent from 2.5 percent. It has raised rates by only a total of 50 basis points so far this year.
The widely expected move by the US will again narrow the spread between US and Philippine rates to as little as 0.5 per cent, which analysts partly blamed for the peso’s volatility in the past six weeks.