Peso stays at 20-month low vs dollar as market awaits BSP policy meeting

Peso stays at 20-month low vs dollar as market awaits BSP policy meeting

Peso stays at 20-month low vs dollar as market awaits BSP policy meeting

THE PESO stayed at a 20-month low on Monday as market players were cautious before the Bangko Sentral ng Pilipinas’ (BSP) policy meeting this week.

The local unit closed unchanged at P58.80 per dollar on Monday, Bankers Association of the Philippines data showed.

This was the peso’s worst finish since its P58.87-a-dollar close on Oct. 24, 2022.

Year to date, the local currency is down by P3.43 from its end-2023 finish of P55.37 against the greenback.

The peso opened Monday’s session weaker at P58.85 versus the greenback, which was also its intraday trough. Its best showing for the session was at P58.78 per dollar.

Dollars traded dropped to $559.25 million on Monday from $807.95 million on Friday.

“Market participants remained on the sidelines ahead of the Bangko Sentral ng Pilipinas policy decision this week,” a trader said in an e-mail.

A second trader said the market was “relatively quiet” and saw some profit taking before the session’s close.

The BSP is widely expected to maintain its policy stance for a sixth straight meeting on Thursday amid persistent risks to the inflation outlook and a weak peso, analysts said.

All 15 analysts in a BusinessWorld poll conducted last week expect the Monetary Board to maintain its target reverse repurchase rate at a 17-year high of 6.5% at its policy meeting this week.

Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message that the market is awaiting forward guidance from the Monetary Board’s meeting, as well as the release of key US data this week, which could affect the Federal Reserve’s policy path.

The dollar was slightly weaker on Monday but remained close to an almost eight-week high, Reuters reported.

The spotlight this week will be on the US personal consumption expenditures price index — the Federal Reserve’s favored gauge of inflation — due on Friday.

The dollar index, which measures the US unit against six peers, was last at 105.66, edging back from a nearly eight-week high of 105.91 it touched last week.

For Tuesday, the first trader said the peso could remain weak against the dollar ahead of likely cautious remarks from Fed officials.

The first trader and Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said the peso could range from P58.70 to P58.90 per dollar on Tuesday.

Meanwhile, the second trader said the peso could move between P58.60 and P58.80 against the greenback. — AMCS with Reuters

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