Peso strength­ens fur­ther ahead of BSP pol­icy de­ci­sion

Business World - - Banking & Finance -

THE PESO strength­ened fur­ther on Thurs­day as the mar­ket ex­pected the cen­tral bank to keep rates steady at its pol­icy meet­ing set to con­clude later in the day.

The lo­cal unit closed at P48.43 ver­sus the dol­lar on Thurs­day, climb­ing 6.5 cen­tavos from its P48.495 fin­ish on Wed­nes­day.

The peso opened Thurs­day’s ses­sion stronger at P48.46 against the green­back. It climbed to as high as P48.41, while its weak­est show­ing was at P48.51 ver­sus the dol­lar.

Dol­lars traded rose to $807.6 mil­lion on Thurs­day from $726.57 mil­lion on Wed­nes­day.

Rizal Com­mer­cial Bank­ing Corp. Chief Econ­o­mist Michael L. Ri­cafort said in a text mes­sage that the peso rose amid ex­pec­ta­tions that the Bangko Sen­tral ng Pilip­inas (BSP) keep bench­mark rates steady.

The BSP was widely ex­pected to leave in­ter­est rates un­touched at its meet­ing on Thurs­day as it wants to leave some room for fur­ther ad­just­ments in case eco­nomic re­cov­ery lags, an­a­lysts said.

In a BusinessWo­rld poll held last week, 14 of 15 an­a­lysts said they ex­pect the Mone­tary Board (MB) to keep in­ter­est rates steady at its fifth pol­icy-set­ting re­view for the year on Oct. 1.

The MB has cut rates by 175 ba­sis points so far this year. Rates on the overnight re­verse re­pur­chase, lend­ing, and de­posit fa­cil­i­ties are cur­rently record lows of 2.25%, 2.75% and 1.75% re­spec­tively.

BSP Gov­er­nor Ben­jamin E. Dio­kno ear­lier said the cur­rent pol­icy stance may be kept for the next few quar­ters. He said the BSP still has bul­lets when needed and is com­mit­ted to a “long-term low in­fla­tion regime” and will con­tinue to do what they have done “for maybe another two years.”

A trader said lo­cal cur­rency saw stronger de­mand ahead of the cen­tral bank’s meet­ing.

“The peso ap­pre­ci­ated from broad mar­ket ex­pec­ta­tions that the BSP will keep main in­ter­est rates un­changed in its pol­icy de­ci­sion later on Thurs­day,” the trader said in an e-mail.

On Fri­day, Mr. Ri­cafort ex­pects the peso to move from P48.40 to P48.55 ver­sus the dol­lar while the trader sees it rang­ing from P48.35 to P48.55. —

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