THE PESO strengthened versus the greenback on Monday after restriction measures were eased and amid expectations of slower inflation.
The peso closed at P50.95 per dollar on Monday, appreciating by 28 centavos from its P51.23 close on Friday, data from the Bankers Association of the Philippines showed.
This is the peso’s strongest close in more than a month or since it finished trading at P50.46 on Dec. 28, 2021, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The peso opened stronger at P51.20 per dollar. Its weakest showing was at P51.23, while its intraday best was its close of P50.95 against the greenback.
Dollars exchanged dropped to $980.79 million on Monday from $1.124 billion on Friday.
The local unit strengthened as the government eased restriction measures in some areas amid the decline in infections, Mr. Ricafort said.
Cabinet Secretary Karlo Alexei B. Nograles said Sunday that Metro Manila, as well as Batanes, Bulacan, Cavite, Rizal, Biliran, Southern Leyte, and Basilan, will be under the more relaxed Alert Level 2 starting Feb. 1, Tuesday.
Under Alert Level 2, business operations will be allowed to operate at a higher 50% indoor capacity and 70% for outdoor settings.
Meanwhile, a trader in an email said the peso strengthened on expectations of slower inflation in January.
A BusinessWorld poll of 16 economists yielded a median estimate of 3% for January inflation. Analysts said favorable base effect will offset the increase in oil prices and the impact of Typhoon Odette to food supply.
If realized, January will be the second consecutive month that inflation was within the 2-4% target of the central bank and will be slower than the 3.6% print in December.
The Philippine Statistics Authority will release January inflation data on Friday, Feb. 4.
Financial markets are closed on Tuesday in view of the Lunar New Year holiday.
For Wednesday, Mr. Ricafort gave a forecast range of P50.85 to P51.05 per dollar, while the trader expects the local unit to move within P50.85 to P51.10. — Luz Wendy T. Noble
