THE PESO weakened against the dollar on Friday due to slower January inflation, which caused investors to make bets on the central bank’s policy move.
The local currency closed at P51.14 per dollar on Friday, down nine centavos from its P51.05 finish a day earlier, data from the Bankers Association of the Philippines’ website showed.
The peso opened at P51 against the greenback. Its weakest showing was P51.14, while its intraday best was P50.95 versus the dollar.
Dollars exchanged fell to $892.5 million on Friday from $1.05 billion on Thursday.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso weakened on easing inflation, which he said could support a more accommodative monetary policy despite hawkish signals from the US Federal Reserve.
Inflation slowed to 3% in January, the fifth straight month of deceleration, as housing and utilities prices eased, preliminary data showed.
This was slower than both the 3.2% in December and the 3.7% in January last year.
The central bank on Friday said the slower inflation seen in January is consistent with its expectation that the consumer price index would be within target this year and next.
The Bangko Sentral ng Pilipinas’ Monetary Board will meet to review its policy settings on Feb. 17. It has kept borrowing costs at record lows since November 2020.
Meanwhile, a trader in an email said the peso weakened as a result of some caution ahead of US employment data for January, which was set to be released later on Friday. — JPI
