THE peso strengthened further on Friday even amid a dollar recovery following monetary policy tightening by the Bangko Sentral ng Pilipinas (BSP) and Federal Reserve.
The peso ended the week at P54.02 against the dollar, following the P54.23 finish on Thursday.
The peso was stronger the whole day, opening the session at P54.10. The high was P54, and the low was P54.16.
Trading volume declined to $699.7 million from $727.37 million the previous day.
A foreign exchange trader said the peso strengthened following the rate hike by the BSP.
“It continued its move yesterday still due to the BSP rate hike and given the change to its inflation outlook,” the trader said over the phone Friday.
The BSP on Thursday as it increased its benchmark rates by 50 basis points (bp) to nine-year highs to temper elevated prices and lend support to the peso.
It also bumped up its inflation forecasts anew to an average of 5.2% this year, against the 4.9% estimate given last month.
Next year, inflation could average 4.3%, also higher than the previous 3.7% estimate.
On Wednesday, the Fed raised its interest rates by a quarter of a percent, leaving intact plans to gradually tighten policy, Reuters reported.
The US central bank sees the economy growing at at a faster-than-expected pace of 3.1% amid sustained low unemployment and stable inflation.
“The peso appreciated following the 50 bp rate hike from the BSP, which is relatively stronger than the 25 bp hike from the Fed,” another trader said in an e-mail. — Karl Angelo N. Vidal

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