THE PESO rose against the dollar on Tuesday due to expectations of another rate hike by the Bangko Sentral ng Pilipinas (BSP) at their meeting this month.
The local unit closed at P56.73 per dollar on Tuesday, strengthening by 22.5 centavos from its P56.955 finish on Friday, based on Bankers Association of the Philippines data.
The peso opened Tuesday’s session stronger at P56.80 against the dollar. Its weakest showing was at P56.855, while its intraday best was at P56.725.
Dollars exchanged dropped to $860.9 million on Tuesday from $1.65 billion on Friday.
The peso strengthened against the dollar on Tuesday amid hawkish signals from the central bank, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“The peso appreciated from lingering prospects of a BSP policy rate hike during the Nov. 16 regular meeting,” a trader likewise said in an e-mail.
The BSP last week raised benchmark interest rates by 25 basis points in an off-cycle move as it seeks to anchor inflation expectations, bringing its policy rate to 6.5%.
The hike came ahead of the Monetary Board’s scheduled meeting on Nov. 16. BSP Governor Eli M. Remolona, Jr. said this month’s review will push through and another rate increase could be on the table as they will have new data to consider by then.
The peso strengthened due to the seasonal increase in remittances due to holidays on Oct. 30, Nov. 1 and Nov. 2, Mr. Ricafort said.
For Friday, the trader said the peso could weaken ahead of potentially robust US labor reports.
The trader sees the peso moving between P56.65 and P56.90 per dollar on Friday, while Mr. Ricafort expects it to range from P56.65 to P56.85. — AMCS