The peso slightly gained against the dollar on Monday due to hawkish signals from the Bangko Sentral ng Pilipinas (BSP).
The local currency closed at PHP 56.785 versus the dollar on Monday, strengthening by a centavo from Friday’s PHP 56.795 finish, data from the Bankers Association of the Philippines’ website showed.
The local unit opened Monday’s session at PHP 56.795 per dollar. Its intraday best was at PHP 56.735, while its weakest showing was at PHP 56.81 against the greenback.
Dollars traded went down to USD 904.9 million on Monday from USD 994.31 million on Friday.
The peso slightly strengthened amid signals from the central bank that there could be another rate hike at the Monetary Board’s (MB) Nov. 16 meeting, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message.
BSP Governor Eli M. Remolona, Jr. said in an interview with Bloomberg TV that the central bank might raise its benchmark rate again at its meeting in November and hinted at the possibility of future rate hikes.
“We’re not convinced it would be the last one. It won’t be the last hike in the cycle,” he said. “We’re still in a hawkish stance.”
The Monetary Board on Thursday maintained its policy rate at 6.25% for a fourth straight meeting.
Interest rates on the overnight deposit and lending facilities were also left unchanged at 5.75% and 6.75%, respectively.
The BSP has raised borrowing costs by 425 bps from May 2022 to March 2023.
Mr. Ricafort added that recent gains at the local stock market to one-week highs also supported the peso.
For Tuesday, Mr. Ricafort sees the peso ranging from PHP 56.68 to PHP 56.88 per dollar. — Aaron Michael C. Sy