Peso climbs on inflation outlook
THE PESO rebounded against the dollar on Wednesday as investors reacted to the central bank’s statement about inflation tapering down.
The local currency ended the session at P53.725 versus the greenback on Wednesday, nine centavos stronger than the P53.815-per-dollar finish last Tuesday.
The peso opened the session at P53.78 per dollar, strengthening to as high as P53.69 intraday. Its worst showing on the other hand was at P53.79 versus the greenback.
Dollars traded slipped slightly to $707.05 million from the $711.9 million that exchanged hands the previous day.
A foreign exchange trader said yesterday the peso closed stronger as market players priced in the likely easing of the inflation following hawkish remarks from a Bangko Sentral ng Pilipinas (BSP) official.
“Headline for peso was more of the inflation wherein most banks are expecting it to taper down. So we saw the strengthening of the peso,” the trader said in a phone interview.
BSP Assistant Governor Francisco G. Dakila, Jr. said on Wednesday that inflation might have already peaked in the third quarter and will start to decelerate in the following months.
Inflation surged to a fresh nineyear high of 6.7% in September, which brought the year-to-date average to 5%, well above the 2-4% initial target by the government.
To arrest inflation and inflation expectations, the central bank has raised interest rates by a total of 150 basis points since May.
Meanwhile, another trader said the peso consolidated as emerging market currencies remain resilient against geopolitical tensions abroad that caused the equity markets to slump. •