Peso strengthens on higher FDIs, lower oil prices

THE PESO strengthened versus the greenback for the second straight day on higher foreign direct investments (FDIs) and the decline in oil prices.

The local unit closed at P51.235 per dollar on Thursday, gaining 10.5 centavos from its P51.34 finish on Wednesday, based on data from the Bankers Association of the Philippines.

The peso opened Thursday’s session stronger at P51.30 per dollar. Its weakest showing was at P51.32, while its intraday best was at P51.21 versus the greenback.

Dollars exchanged declined to $937.4 million on Thursday from $992.1 million on Wednesday.

The peso rebounded on data showing higher FDIs, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Data released by the central bank on Thursday showed FDIs in November 2021 climbed by 96% year on year to $1.095 billion from $559 million. This is the highest in nearly two years or since the $1.362 billion logged in December 2019.

For the first 11 months of 2021, FDIs rose by 52.5% to $9.238 billion from $6.057 billion in the same period of 2020. This already exceeded the $8-billion end-2021 projection of the central bank.

Meanwhile, a trader attributed the peso’s strength to the continued decline in global oil prices.

Brent crude futures inched down by 28 cents or 0.3% to $91.27 a barrel at 0714 GMT, while the US West Texas Intermediate crude slipped 19 cents to $89.47 a barrel, Reuters reported.

For Friday, Mr. Ricafort gave a forecast range of P51.12 to P51.32 per dollar, while the trader expects the local unit to move within P51.25 to P51.40. — with Reuters