The local currency gained 10 centavos to close at 53.97 to $1 from Thursday’s close of 54.07 to $1. It opened stronger at 54.02 and weakened to hit an intraday low of 54.06 before recovering in afternoon trade and hitting an intraday high of 53.965.
Edd Gumban
Peso vaults back to 53:$1 territory
Lawrence Agcaoili (The Philippine Star) - September 15, 2018 - 12:00am

MANILA, Philippines — The peso continued to strengthen yesterday, returning to the 53 to $1 level on the back of the aggressive action of the Bangko Sentral ng Pilipinas (BSP) to check rising inflation as well as the progress of the trade talks between the US and China.

The local currency gained 10 centavos to close at 53.97 to $1 from Thursday’s close of 54.07 to $1. It opened stronger at 54.02 and weakened to hit an intraday low of 54.06 before recovering in afternoon trade and hitting an intraday high of 53.965.

Volume reached $660.15 million yesterday, slightly higher than the $658.3 million recorded last Thursday.

Prakash Sakpal, economist in Asia for ING Bank NV, said the strong peso could be attributed to the recovery of the country’s gross international reserves (GIR) last month.

 “A bounce in foreign exchange reserves in August also heralded some improvement in the overall balance of payments in the last month,” Sakpal said.

The country’s GIR climbed  by $1.1 billion to $77.83 billion in August from $76.72 billion after the national government raised $1.4 billion from the sale of the multi-tranche samurai bonds.

Sakpal said the peso would also continue to stabilize with the expected recovery of remittances from overseas Filipino workers, translating to an improved balance of payments (BOP) position.

 “Philippines’s July overseas workers remittances and the August balance of payments position are expected to be positive for the local currency. Remittances were unusually weak in June this year despite seasonal inflows for school fee payments but we expect some improvement in July helped by the stabilization of the peso,” Sakpal said.

Another trader traced the temporary recovery of the peso to the positive trade negotiations between the US and China.

Likewise, the market is anticipating another aggressive action from the BSP during its rate-setting meeting on Sept. 27.

The BSP has so far jacked up interest rates by 100 basis points to curb rising inflationary expectations as inflation jumped to a fresh nine-year high of 6.4 percent in August from 5.7 percent in July.

It lifted rates by 25 basis points for the first time in more than three years last May 10 followed by another 25 basis points last June 20 and 50 basis points- the biggest in 10 years – last Aug. 9.

BANGKO SENTRAL NG PILIPINAS
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