Connect with us

Hi, what are you looking for?


Peso rebounds vs dollar as BSP delivers large interest rate hike


THE PESO strengthened against the dollar on Thursday after the Bangko Sentral ng Pilipinas (BSP) delivered another large increase in benchmark interest rates.

The local currency closed at P55.12 versus the greenback on Thursday, climbing by five centavos from Wednesday’s P55.17 finish, Bankers Association of the Philippines data showed.

The peso opened Thursday’s trading session weaker at P55.35 per dollar. Its intraday best was at P55.02, while its worst showing was at P55.39 against the greenback.

Dollars traded rose to $1.14 billion on Thursday from $1.072 billion on Wednesday.

“The peso appreciated amid expectations of a strong BSP policy rate hike today,” a trader said in a Viber message on Thursday.

The peso strengthened “after the larger local policy rate hike of 50 basis points (bps) to 6%… that could support the peso with higher interest differential versus the dollar,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort likewise said in a Viber message.

The BSP on Thursday hiked benchmark interest rates by 50 bps for a second straight meeting, bringing its policy rate to 6%, amid higher prices and rising inflation expectations.

The rates on the central bank’s overnight deposit and lending facilities were also increased to 5.5% and 6.5%, respectively.

The BSP has now hiked borrowing costs by 400 bps since May 2022.

Headline inflation rose by 8.7% year on year in January, faster than 8.1% in December 2022 and marking the 10th straight month that it exceeded the central bank’s 2-4% target for the year.

Meanwhile, the US Federal Reserve earlier this month raised its target interest rate by 25 bps to a range between 4.5% and 4.75%, bringing cumulative hikes since March 2022 to 450 bps.

Stronger foreign investments data for 2022 and the government’s recently concluded retail Treasury bond (RTB) offer also supported the peso, Mr. Ricafort added.

Approved foreign investment pledges rose by 25.6% last year, preliminary data from the Philippine Statistics Authority showed.

Total approved foreign investments stood at P241.89 billion last year, higher than the P192.55 billion in 2021 and more than double the P112.12 billion recorded in 2020.

Foreign investments jumped by 30.1% year on year to P173.61 billion in the fourth quarter of 2022. The growth was slower than the 265.8% seen in the final three months of 2021 but was a turnaround from the 22.4% decline in the third quarter last year.

Last quarter’s foreign investment haul was the largest in 13 straight quarters or since the P182.44 billion seen in the third quarter of 2019.

Meanwhile, the government raised P283.711 billion from its offering of 5.5-year RTBs that ended two days ahead of schedule, National Treasurer Rosalia V. de Leon told reporters on Wednesday.

Of this total, the government raised P31.671 billion from the bond exchange offer program.

The 5.5-year retail bonds carry a coupon rate of 6.125%.

For Friday, the trader said the peso may strengthen further against the dollar following the BSP’s latest policy move.

“The 25-bp differential from the Fed’s adjustment will be beneficial in favor of the peso relative to the greenback,” the trader added.

The trader sees the peso moving between P54.95 and P55.20 versus the greenback on Friday, while Mr. Ricafort gave a forecast range of P55 to P55.20. — AMCS

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



THE PHILIPPINE government should take time to study the transport modernization program and execute it properly rather than rush the whole process, according to...


OJ SERRANO-UNSPLASH Shinagawa Healthcare Solutions Corp. is preparing to open a diagnostic and preventive care center in Bonifacio Global City (BGC) next month, the...


PHILIPPINE STAR/ KRIZ JOHN ROSALES The Philippine government is planning to launch a retail dollar bond offering next month, Finance Secretary Benjamin E. Diokno...


PHILSTAR Fisherfolk, farmers, children, and individuals residing in rural areas remained the poorest sectors in 2021, according to the Philippine Statistics Authority (PSA). Preliminary...

Editor’s Pick

<?xml encoding=”utf-8″ ??> Ten construction firms have been fined a combined £60m by the competition regulator for “illegally colluding” to rig bids for lucrative...

Editor’s Pick

<?xml encoding=”utf-8″ ??> Just 1% of the estimated £1.1bn lost from the government’s Covid business support programme in England as a result of fraud...

You May Also Like


COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...


REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...


BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...


KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.