The peso strengthened anew against the dollar on Friday, Feb. 23, retreating back to the P51 level, as the local currency continued to correct following its plunge on Monday, Feb. 19.

The local currency ended the week at P51.89 against the greenback yesterday, 21 centavos stronger from its P52.10 close on Wednesday and Thursday.

The peso traded stronger the whole day, opening the session at P52 versus the dollar, while its best showing yesterday was at P51.82. Its intraday low, meanwhile, was seen at P52.05 to the greenback.

Dollars traded slightly declined to $656.3 million yesterday from the $668.4 million that changed hands in the previous session.

Traders interviewed over the phone on Friday said the peso continued its strength as a correction after it plunged to the P52 level on Monday.

“The magnitude of the move is too big, and given the fact that there was a support in the past four trading days. There was a support for the peso,” a trader said.

On Monday, the peso traded as low as P52.45 intraday after the Bangko Sentral ng Pilipinas (BSP) cut banks’ reserve requirement ratio by a percentage point before the long weekend, catching the market players off guard.

The trader said that the move from the BSP will free up to P90 billion into the system, causing the peso’s value to weaken.

“Probably, the BSP is providing liquidity lately. That prompted most of the players to try to square out the long-dollar-peso positions for now. Thus we saw a good correction,” the trader noted.

Meanwhile, another trader said that the domestic trading tracked the stronger local currency in the offshore exchange market.

“The offshore dollar-peso trading went [higher], that’s why we saw the peso strengthening [yesterday],” the trader said, adding that the pair continued to trade within the range. — Karl Angelo N. Vidal