Currencies 2 MIN READ

Peso drops ahead of inflation data

March 6, 2023By BusinessWorld

THE PESO declined against the dollar on Monday due to expectations of faster February inflation.

The local currency closed at PHP 54.88 versus the greenback on Monday, dropping by six centavos from Friday’s finish of PHP 54.82, data from the Bankers Association of the Philippines’ website showed.

The peso opened Monday’s trading session at PHP 54.80 per dollar. Its intraday best was at PHP 54.76, while its worst showing was at PHP 55.915 against the greenback.

Dollars traded dropped to USD 810.1 million on Monday from the USD 1.287 billion recorded on Friday.

The peso weakened ahead of the release of the February consumer price index (CPI) report on Tuesday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Mr. Ricafort said the market expects inflation to have reached a fresh peak last month.

“​The peso weakened due to some caution ahead of the Philippine inflation report tomorrow,” a trader said in an e-mail.

A BusinessWorld poll of 17 analysts yielded a median estimate of 8.9% for February headline inflation, within the 8.5% to 9.3% forecast of the Bangko Sentral ng Pilipinas (BSP) for the month.

If realized, this will be faster than the 14-year high of 8.7% seen in January and the 3% a year earlier. It will also exceed the BSP’s 2-4% target for the year.

The trader said the peso-dollar trading on Tuesday will be driven by the release of February inflation data.

The trader expects the peso to move between PHP 54.80 and PHP 55 per dollar on Tuesday, while Mr. Ricafort sees the peso trading at PHP 54.75 to PHP 54.95. — AMCS

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