THE PESO appreciated against the dollar on Tuesday after the Bangko Sentral ng Pilipinas said it would expand the transactions covered by its Currency Rate Risk Protection Program (CRPP).
The local currency closed at PHP 55.54 versus the dollar on Tuesday, rising by 23 centavos from Monday’s PHP 55.77 finish, data from the Bankers Association of the Philippines’ website showed.
The local unit opened Tuesday’s session at PHP 55.65 per dollar, which was also its worst showing for the day. Its intraday best was at PHP 55.43 versus the greenback.
Dollars traded went up to USD 1.27 billion on Tuesday from the USD 1.21 billion recorded on Monday.
The peso climbed against the dollar after the BSP announced that it would expand the coverage of its CRPP to include non-trade transactions and investments, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The CRPP offers non-deliverable forward contracts as an alternative to sourcing US dollars and could “somewhat ease pressure from the local foreign exchange spot market,” Mr. Ricafort said.
“The peso reacted positively to the BSP’s announcement of an expanded Currency Rate Risk Protection Program,” a trader likewise said in a Viber message.
The BSP also expanded the coverage of the CRPP to include sector foreign currency borrowings from both the public and private sector. It added foreign merchandise trade transactions, non-trade account and resident-to-resident foreign exchange transactions, and outward investments.
“As such, due to the possibility of renewed depreciation pressure in the peso following the continued interest rate hikes by the Fed (US Federal Reserve), we would like to remind all universal and commercial banks that the CRPP facility remains open,” BSP Deputy Governor Chuchi G. Fonacier said.
For Wednesday, Mr. Ricafort sees the peso moving from PHP 55.40 to PHP 55.60 per dollar, while the trader said that the peso could trade between PHP 55 and PHP 56 for the rest of the week. — By AMCS
This article originally appeared on bworldonline.com