Peso firms up as BSP vows to reactivate currency risk protection tool

The Philippine peso firmed up against the greenback on Friday after the Bangko Sentral ng Pilipinas announced that it intends to reactivate its currency risk protection tool to ease demand pressures in the foreign exchange market.

The local currency gained 7 centavos to close at P53.73:$1 from 53.80 on Thursday.

Union Bank of the Philippines chief economist Ruben Carlo Asuncion noted that the pesos rebound after the BSP issued a statement saying it will reactive the Currency Risk Protection Program.

The peso traded near the P54:$1 level during the morning session and hit an intra-day low of P53.975:$1

“The BSP has reactivated a 1997 directive that was aimed at easing demand pressures in the foreign exchange spot market from borrowers wanting to hedge their future foreign exchange exposures,” Asuncion said.

The dollar also weakened against major currencies after the US reported weaker data on private sector jobs creation.

The private sector jobs data came ahead of the broader US employment later in the day, Rizal Commercial Banking Corp. head of economics Michael Ricafort said.

Dovish statements of New York Fed President John Williams that there was no need for the Fed to raise rates more quickly went against the dollar, Ricafort noted.

Week-on-week, the local currency shed 25.5 centavos from P53.475:$1 on August 31. The peso was weaker by P3.92 from 49.810 on Jan. 3, the first trading day of 2018. —VDS, GMA News