Peso rises on expectations of easing inflation
THE PESO appreciated against the dollar on Tuesday after the Bangko Sentral ng Pilipinas (BSP) said it expects inflation to have eased further in July.
The local currency closed at P54.77 versus the dollar on Tuesday, strengthening by 11 centavos from Monday’s P54.88 finish, data from the Bankers Association of the Philippines’ website showed.
The local unit opened Tuesday’s session at P54.85 per dollar, which was also its weakest showing for the day. Its intraday best was at P54.68 against the greenback.
Dollars traded went down to $972.5 million on Tuesday from the $1.03 billion seen on Monday.
“The peso strengthened anew after the BSP’s inflation projection for July 2023 supported views of a continued decline in domestic inflation,” a trader said in an e-mail.
The BSP expects July inflation to have settled within the 4.1% to 4.9% range, slower than the 5.4% print in June and the 6.4% logged in July 2022.
If realized, July would mark the sixth straight month of easing inflation since the peak of 8.7% in January, but it would be the 16th consecutive month inflation exceeded the BSP’s 2-4% target.
A BusinessWorld poll of 17 analysts last week yielded a median estimate of 4.9% for July inflation
The Philippine Statistics Authority will release July consumer price index data on Aug. 4.
For Wednesday, the trader said the peso could continue to appreciate against the dollar as the market awaits the inflation report.
The trader sees the peso moving between P54.60 and P54.85 per dollar on Wednesday. — AMCS
