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Peso moves sideways ahead of BSP policy meeting

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THE PESO closed sideways versus the greenback on Thursday as investors awaited the central bank’s monetary policy decision, which came after the market’s close.

The local unit finished trading at P50 per dollar on Thursday, depreciating by two centavos from its P49.98 close on Wednesday, data from the Bankers Association of the Philippines showed.

The peso opened the session at 50.05 per dollar, which was also its weakest showing for the day. Meanwhile, its intraday best was at P49.95 against the greenback.

Dollars traded reached $848.93 million on Thursday, higher than the $671.3 million seen on Wednesday.

The peso moved sideways yesterday as investors were on the lookout for leads from the Monetary Board’s policy-setting meeting, a trader said.

“Basically, the range was very tight. I think a lot of market players were awaiting the result of the policy meeting, people are speculating what will be done and it depends on the comments that will be made and if there will be changes in the rates,” the trader said in a phone call.

Ten out 13 economists polled by BusinessWorld earlier this week expected the Bangko Sentral ng Pilipinas (BSP) to keep rates steady on Thursday, saying it is likely to wait to better gauge the impact of the pandemic on the economy.

The BSP had cut rates by 125 basis points so far this year, bringing the overnight reverse repurchase, lending and deposit rates to record lows of 2.75%, 3.25% and 2.25%, respectively.

BSP Governor Benjamin E. Diokno said earlier this month they are “happy” with where the policy rates are but said the BSP continues to have ammunition if the situation gets worse.

Aside from the policy decision, investors were also cautious amid the rise of coronavirus disease 2019 (COVID-19) infections in the US, another trader said.

“The peso depreciated amid increasing concerns about the strong resurgence of new COVID-19 cases in various US states and some caution ahead of the BSP policy meeting,” the second trader said in an e-mail.

The first trader expects the peso to play around the P49.90 to P50.20 band versus the dollar today while the second trader sees the local unit moving around the P49.90 to P51.10 levels. — L.W.T. Noble





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