Peso slips ahead of BSP meeting

THE PESO inched down against the greenback on Thursday ahead of the central bank’s policy review.

The local unit ended at P50.39 per dollar, shedding one centavo from Wednesday’s close of P50.38, based on Bankers Association of the Philippines data.

The local currency opened the session at P50.35 versus the dollar. Its weakest point was at P50.46, while its intraday best was at P50.34 against the greenback.

Dollars traded on Thursday fell to $723.3 million from $896.6 million on Wednesday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso ended weaker versus the greenback during the final trading hour ahead of the central bank’s rate-setting meeting later in the day.

A trader likewise said the peso weakened as investors were cautious ahead of the Monetary Board’s meeting.

The Bangko Sentral ng Pilipinas (BSP) kept benchmark interest rates steady for the six straight meeting on Thursday to support the economy’s recovery. The rate on the BSP’s overnight reverse repurchase facility was kept at 2%. The yields on the overnight deposit and lending facilities were also unchanged at 1.5% and 2.5%, respectively.

“Peso weaker after the latest decline in the local stock market, more dovish signals from most [US Federal Reserve] officials recently on possible tapering of Fed bond purchases as early as later this year after stronger US jobs data,” Mr. Ricafort added.

The Philippine Stock Exchange index fell by 110.29 points or 1.65% to close at 6,556.57 on Thursday, while the all shares index went down by 51.68 points or 1.25% to close at 4,059.93.

“The local currency might weaken [on Friday] after the central bank revised up its inflation projections citing various upward price pressures,” the trader added.

The trader expects the peso to move between P50.30 and P50.50 per dollar on Friday, while Mr. Ricafort gave a narrower forecast range of P50.35-50.45 against the greenback. — BML

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