Drop in global oil prices drives peso back to P52:$1 level

The Philippine peso continued to appreciate against the US dollar to return back to the P52:$1 level on Thursday, following the continued drop in global oil prices.

The local currency gained 28.5 centavos to close at P52.805:$1 versus the P53.09:$1 on Wednesday.

According to Rizal Commercial Banking Corp. (RCBC) lead economist Michael Ricafort, the strengthening of the peso rode came after oil prices fell to near one-year lows.

"Peso also stronger after global oil prices lingered at near one-year lows that could reduce the country's oil imports and narrow the budget deficit," he said in a text message.

"Peso also gained after the government's suspension of new excise tax hikes on fuel/petroleum scheduled in January 2018 and after the Senate approved the rice tariffication bill, both of which to further ease inflation," elaborated Ricafort.

Ricafort also noted that the recent BSP policy decision which raised rates by another 25 basis points (bps) could be taken into consideration on Friday.

"Market was somewhat divided on policy rates expectations, so the +0.25-rate hike came as a surprise for some, thereby turned out to be positive for the peso," he explained. — RSJ, GMA News