Peso inches up versus the dollar

THE PESO inched higher against the dollar on Thursday after the Bangko Sentral ng Pilipinas (BSP) kept benchmark interest rates unchanged at its policy meeting.

The local currency closed at P55.62 versus the dollar on Thursday, rising by 2.50 centavos from Wednesday’s P55.645 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Thursday’s session at P55.57 per dollar. Its weakest showing was at P55.66, while its intraday best was at P55.53 against the greenback.

Dollars traded dropped to $747.4 million on Thursday from the $1.01 billion seen on Wednesday.

The peso rose after the BSP left rates untouched, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The central bank kept its policy rate at 6.25% for a second straight meeting on Thursday, as expected by 15 economists in a BusinessWorld poll held last week.

Interest rates on the overnight deposit and lending facilities were likewise maintained at 5.75% and 6.75%, respectively.

The central bank had raised borrowing costs by 425 basis points from May 2022 to March 2023 to help bring down inflation.

“The peso strengthened amid expectations of hawkish remarks from the BSP monetary policy meeting today,” a trader added in an e-mail.

The BSP said in its policy statement that it remains vigilant of risks from elevated inflation and potential second-round effects and is prepared to hike rates again should new data warrant tightening.

The peso also rose after the central bank trimmed its 2023 inflation forecast to 5.4% from 5.5% previously.

For Friday, both the trader and Mr. Ricafort see the peso moving between P55.50 and P55.70 per dollar. — AMCS