Peso sinks to P52:$1 level as oil prices surge

 Peso sinks to P52:$1 level as oil prices surge

THE PESO retreated versus the greenback and closed at its weakest level in more than two years amid market concerns on the impact of a possible import ban on Russian oil by Western allies.

The local unit closed at P52.18 per dollar on Monday, shedding 44 centavos from its P51.74 finish on Friday, based on Bankers Association of the Philippines data.

This is the peso’s weakest close in more than two years or since it finished trading at P52.211 on Sept. 25, 2019, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The peso opened weaker at P51.90 per dollar on Monday. Its worst showing was at P52.19, while its intraday best was at P51.85 against the greenback.

Dollars exchanged increased to $1.58 billion on Monday from $793.22 million on Friday.

“The peso closed significantly weaker as international crude prices breached the $130 level after the US hinted about a potential embargo of Russian oil exports,” a trader said in an e-mail.

Reuters reported that US and its European allies were looking into banning imports of Russian oil. US Secretary of State Antony Blinken on Sunday said the White House and the Congress are coordinating on the said ban.

Following the news, oil prices edged higher, with Brent hitting $139.13 in the first few minutes of trade on Sunday, while West Texas Intermediate was at $130.50 per barrel, their highest since July 2008.

Aside from oil prices, the peso weakened due to the local stock benchmark’s decline, Mr. Ricafort said.

The benchmark Philippine Stock Exchange index dropped by 53.94 points or 0.73% to end at 7,288.07 on Monday. Meanwhile, the wider all shares index declined by 28.54 points or 0.73% to 3,866.98.

For Tuesday, Mr. Ricafort expects the local unit to move within P52 to P52.30 per dollar, while the trader gave a forecast range of P52 to P52.40. — LWTN with Reuters