The peso weakened against the dollar on Friday, May 11, following the “dovish” remarks from the Bangko Sentral ng Pilipinas (BSP).
The peso closed the session at P52.19, dipping 39 centavos from the P51.80-per-dollar finish.
The peso traded weaker the whole day, opening the session at P51.95. It fell to as low as P52.21, while its intraday high stood at P51.90.
Dollars traded soared to $1.13 billion from Thursday’s $807.4 million.
“The peso moved significantly higher [on Friday],” a trader said in a phone interview. “With the BSP’s rate hike [on Thursday], the move supposed to be supportive of the peso. But what happened was the opposite.”
The monetary authority Thursday hiked key rates by 25 basis points amid accelerating inflation and robust economic growth.
Another trader attributed the weakness of the peso to the remarks from the central bank about another rate hike.
“The peso weakness was due to the statement from the BSP saying that there won’t be another hike this year,” the trader said over the phone.
BSP Deputy Governor Diwa C. Guinigundo said that the 25 basis point hike will be sufficient enough to temper the rising inflation.
“The reading of the market about the remarks was that the BSP is still dovish,” the trader added in a mix of English and Filipino.
“The peso weakness came maybe from expectations of more BSP rate hikes this year. However, I do not see this happening,” Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, said in a text message. — Karl Angelo N. Vidal