Peso regains ground back at ₱55 level vs USD

The peso had its strongest level in two months on Monday, Nov. 6, when it appreciated to ₱55.73 intraday after opening at ₱55.8 versus Friday’s close of ₱56.1.

At the end of Monday’s exchange rate spot market, the peso closed at ₱55.91 as per data from the Bankers Association of the Philippines (BAP).

The last time the local currency was at the ₱55 level was on Aug. 8, 2023, based on Bangko Sentral ng Pilipinas (BSP) data. At the time, the peso was lounging between ₱54 and ₱55 from January to August with some brief stint at ₱56 in May. After Aug. 8, the peso has stayed at the ₱56 range and was close to ₱57 several times.

On Monday, the peso’s weighted average rate was at ₱55.826 from ₱56.252 on Nov. 3. The total BAP volume reached $1.15 billion which was lower compared to the prevous $1.84 billion.

Market analysts have known for sometime that the BSP has been supporting the peso to not break ₱57.

Its hawkish or tightening bias has helped stabilized the peso below ₱57 for months.

The Monetary Board decision to raise the key rate in an off-cycle move last Oct. 26 has given the market more confidence that the peso will remain resilient versus the strong US dollar.

BSP Governor Eli M. Remolona Jr. said on Oct. 27 that they are not intervening much in the exchange rate market but closely watching the peso movement. He said previously that they could comfortably keep the peso at current levels for some time.

After the recent off-cycle rate hike, the BSP’S key rate is currently at 6.5 percent after staying fix at 6.25 percent for the past four Monetary Board policy meetings in a row.

The BSP has always emphasized that it has a flexible and free-floating exchange rate policy, which means it is market-determined. However, it is prepared to participate in the exchange rate market to ensure orderly market conditions and to reduce excessive short term volatility.