The peso exchange rate Monday opened at 58.95 against the dollar, weakened at nearly 60.00, then strengthened a bit at 58.888 before closing at 58.965 on Wednesday. Total volume traded yesterday came to $505.37 million.
Getting his comments on how the peso fared, Rizal Commercial Banking Corp. chief economist Michael Ricafort said, “The dollar/peso exchange rate was higher for the third day in four trading days to close at 58.965.”
This, after the latest hawkish Fed signals, Ricafort said, “thereby partly leading to the continued healthy downward correction in the dollar against major global currencies recently highlighted by the dollar/Japanese yen back to 145 levels – among the highest in more than 24 years or since August 1998, despite the intervention by the Bank of Japan about two weeks ago – ahead of the latest US inflation data on 13 October 2022; as well as the IMF’s reduction of its global economic growth estimate for 2023 to 2.7 percent (from the previous 2.9 percent).”
BoE halting intervention
Furthermore, the RCBC economist said, “Bank of England Governor Bailey urged investors to finish winding up positions that they cannot maintain, because the UK central bank will halt its intervention as planned on Friday, 14 October 2022.”
An offsetting positive factor affecting the peso exchange rate is the Chinese Embassy’s formal denial of earlier reports about the blacklisting of the Philippines for Chinese tourism because of crimes related to POGO operations in the country.
“Philippine banks, through the Bankers Association of the Philippines, pledged to work with the Bangko Sentral ng Pilipinas in fighting speculative activities that tend to distort market prices in the foreign exchange market and hurt the economy, supporting as well the BSP’s initiatives to ensure orderly markets,” Ricafort said.
BSP Governor Felipe Medalla signaled that the peso’s depreciation has been adding to the buildup of inflationary pressures, thereby strengthening the case to act decisively, Ricafort added.