THE PESO strengthened on Thursday after the central bank continued to keep borrowing costs steady to support economic recovery.
The local unit closed at P52.33 per dollar on Thursday, rising by six centavos from its P52.39 finish on Wednesday, based on data from the Bankers Association of the Philippines.
The peso opened Thursday’s session at P52.41 per dollar. Its weakest showing was at P52.43, while its intraday best was at P52.15 against the greenback.
Dollars exchanged declined to $960.95 million on Thursday from $1.015 billion on Wednesday.
The peso appreciated after the central bank left benchmark rates at record lows, a trader said in a Viber message.
The Bangko Sentral ng Pilipinas (BSP) kept rates steady at its meeting on Thursday but said it could hike soon amid rising inflation risks amid the war between Russia and Ukraine.
“The Monetary Board sees scope to maintain the BSP’s policy settings in order to safeguard the momentum of economic recovery amid increased uncertainty, even as it continues to develop its plans for the gradual normali-zation of its extraordinary liquidity measures,” BSP Governor Benjamin E. Diokno said at a virtual briefing on Thursday.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso appreciated following the BSP’s new inflation forecasts.
Citing the steep increase in prices of oil and other commodities, the central bank now expects inflation to reach 4.3% in 2022, which is already above its 2-4% target and the 3.7% estimate previously.
By 2023, inflation is expected to slow to 3.6%.
For Friday, both Mr. Ricafort and the trader gave a forecast range of P52.20 to P52.40 per dollar. — LWTN