THE PESO inched up versus the dollar on Wednesday amid the extended implementation of the general community quarantine in Metro Manila and expectations the central bank will keep rates unchanged at its meeting today (Oct. 1).
The local unit closed at P48.495 versus the dollar on Wednesday, up by less than a centavo from its P48.50 finish on Tuesday.
The peso opened Wednesday’s session stronger at P48.41 against the dollar. It reached a peak at P48.38 but succumbed to the dollar’s strength as it closed nearer to its intraday low of P48.50 versus the greenback.
Dollars traded rose to $726.57 million on Wednesday from $536.21 million on Tuesday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message that the peso inched up versus the dollar following the extension of current quarantine protocols in Metro Manila, which boosted sentiment as more people can return to work.
Meanwhile, a trader said in an e-mail that the peso rose as the market expects the Bangko Sentral ng Pilipinas (BSP) to keep benchmark rates steady as it meets today.
The BSP is widely expected to leave benchmark interest rates untouched as it wants to leave some room for further adjustments in case economic recovery lags, analysts said.
In a BusinessWorld poll held last week, 14 of 15 analysts said they expect the Monetary Board (MB) to keep interest rates steady at its fifth policy-setting review for the year on Oct. 1.
The MB has cut rates by 175 basis points so far this year. Rates on the overnight reverse repurchase, lending, and deposit facilities are currently record lows of 2.25%, 2.75% and 1.75% respectively.
Mr. Diokno earlier said the current policy stance may be kept for the next few quarters. He said the BSP still has bullets when needed and is committed to a “long-term low inflation regime” and will continue to do what they have done “for maybe another two years.”
For today, Mr. Ricafort sees the peso moving from P48.45 to P48.55 versus the dollar while the trader expects it to range from P48.30 to P48.50. — KKTJ