Peso rebounds against US dollar as Qatar’s pledge supports lira

THE PESO strengthened slightly against the dollar on Thursday as Qatar’s investment pledge supported the Turkish lira.

The local unit ended the session at P53.44 versus the greenback on Thursday, up three centavos from the P53.47-per-dollar finish on Wednesday.

The peso opened the session flat from Wednesday at P53.47 versus the dollar. It slipped to an intraday low of P53.50, while its best showing for the day stood at P53.37 against the US currency.

Dollars traded climbed to $844.1 million from the $585.9 million that switched hands in the previous session.

In a phone interview, a trader said the peso mostly traded sideways yesterday.

“The dollar-peso traded within a tight range. We started [weaker] because of the continued risk-off sentiment overnight,” the trader said.

The trader said the peso strengthened since offers at the intraday high were thick. “We saw a big seller near the close, so from a [low] of P53.30, it closed stronger at P53.47.”

Meanwhile, another trader said: “The local currency appreciated after Qatar was reported to pledge $15 billion worth of investments for Turkey to address its currency crisis and help defend the lira.”

Qatar will make $15 billion of direct investments into Turkey which a government source said would be channeled into its banks and financial markets, Qatar’s Emir Tamim bin Hamad Al Thani told President Tayyip Erdogan during talks in Ankara, the Turkish presidency said on Wednesday,

The move by Turkey’s Gulf ally offered support to the lira after the Turkish central bank slashed currency reserve requirements for banks and curbed selling of the currency.

The currency has lost nearly 40% against the dollar this year, driven by worries over Mr. Erdogan’s growing influence on the economy and his repeated calls for lower interest rates despite high inflation.

Its precipitous decline has raised concerns about the resilience of Turkey’s banking sector and caused ructions on global markets.

Following the Qatar news, the lira firmed briefly to 5.8699 from 6.04 to the dollar, before easing back to 6.0500 by 1658 GMT.

The currency had rebounded some 6% on Wednesday after the central bank squeezed lira liquidity in the market, effectively pushing up rates and supporting the currency.

Turkey and Qatar have traditionally maintained good ties.

For Friday, the first trader expects the peso to move between P53.35 and P53.50 versus the dollar, while the other gave a P53.35P53.55 forecast range.

“The peso might find strength on possible profit-taking from the dollar and likely firm inflation readings from the Eurozone,” the second trader noted. •