Peso strengthens anew
THE PESO strengthened against the dollar on Tuesday as traders position ahead of the Bangko Sentral ng Pilipinas’ (BSP) rate-setting meeting on Thursday and amid growing external uncertainties.
The local currency closed at P53.1 versus the greenback yesterday, gaining 19 and a half centavos from the P53.295-perdollar close on Monday.
The peso opened slightly stronger at P53.28 before peaking at P53.08. Its intraday trough, on the other hand, was at P53.30 versus the dollar.
Dollars traded grew to $738.7 million from $666.1 million on Monday.
A trader said there’s still uncertainty on whether the local central bank will continue to hike or hold interest rates.
“There’s a BSP rate decision on Thursday so the market is looking for that. So they’re trimming their position ahead of that. They’re looking that the BSP will hike, but they may follow the Fed[eral Reserve] so it can hold for now,” a trader said in a phone interview yesterday.
“If they hike rates, the dollarpeso may go down further so they’re still seeing the peso positive. But they are lightening their position as the BSP may still hike,” the trader said.
A BusinessWorld poll showed six of 11 economists expecting to hold interest rates, while the other five expect the BSP to hike rates by at least 25 basis points. The central bank has raised the policy rates by a cumulative 150 basis points since May.