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Peso closes higher as banks stock up for holidays

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PHILSTAR/KRIZ JOHN ROSALES

THE peso recovered against the dollar on Friday as banks built up their peso holdings ahead of the holiday break, a high-spending period when peso bills are also in high demand for gift-giving.

The peso ended the week at P52.86 to the dollar, 24 centavos stronger compared with its Thursday close.

The peso opened the session weaker at P53.15. The low was P53.215 intraday before the unit rallied to close at its high.

Dollars traded rose to $726.55 million from the $685.92 million the previous day.

Two foreign exchange traders attributed the recovery to the demand for the peso as banks sought more pesos ahead of the four-day weekend.

“Initially, the market traded [weaker] at around P53.15-P53.21. But as peso liquidity was squeezed, we saw a quick selloff. So it traded stronger to P53 in the morning, closing at its best showing in the afternoon session,” one trader said in a phone interview.




The other trader said the peso strengthened as the dollar-peso swap market was “significantly higher in the past few days,” especially on Friday.

“If you want to buy dollars just for position taking today, the cost of going long dollar against the peso is expensive given the high interest rate of the peso in the swap market,” the second trader said.

“I don’t know it it’s liquidity since most banks are trying to cover for their peso requirements.”

The traders also noted an influx of remittances from overseas Filipinos in time for the holiday season.

“I think for this year-end, there’s an anticipation of inflows for (the traders), so the market is repositioning for that,” the first trader noted.

Markets will be closed on Monday and Tuesday for Christmas. — Karl Angelo N. Vidal