THE PESO ended weaker versus the dollar on Wednesday as the country posted a four-year high balance of payments (BoP) deficit in September and amid hawkish signals from a US Federal Reserve official.

The local unit closed at P58.945 against the dollar on Wednesday, down by 19.5 centavos from P58.75 on Tuesday, data from the Bankers Association of the Philippines’ website showed.

The peso opened the session at P58.85 against the dollar. Its weakest showing was at P58.99, while its intraday best was at P58.8 versus the greenback.

Dollars exchanged went up to $654 million on Wednesday from $610.8 million on Tuesday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso weakened versus the dollar as latest data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday showed the country’s BoP gap stood at a four-year high last month.

The country posted a $2.3-billion BoP deficit in September, bigger than the $572-million deficit the prior month. This was also wider than the $412-million deficit seen in September 2021 and is the biggest since the $2.696-billion gap recorded in September 2018.

In the first nine months, the country’s BoP gap widened to $7.83 billion from the $665-million deficit posted in the same period in 2021.

The BSP expects the country’s BoP position to end the year at an $8.4-billion deficit equivalent to -2% of gross domestic product amid weaker global demand.

The peso also weakened after the hawkish comments from a Fed official, Mr. Ricafort added.

The Fed may need to push its benchmark policy rate above 4.75% if underlying inflation does not stop rising, Minneapolis Federal Reserve Bank President Neel Tushar Kashkari said on Tuesday.

The US central bank has raised borrowing costs by 300 basis points (bps) since March. The US federal funds rate is now at 3-3.25%.

Markets expect the Fed to fire off a fourth straight 75-bp increase in its Nov. 1-2 meeting as inflation remains high.

For Thursday, Mr. Ricafort gave a forecast range of P58.80 to P59 per dollar. — K.B. Ta-asan