Peso snaps 4-day downtrend on record-high reserves data

The Philippine peso snapped a four-day downtrend against the US dollar on Friday as investors cheered reports that the country’s foreign currency reserves hit a record-high in September.

The local currency gained 5.5 centavos to close at P48.625:$1 from Thursday’s finish at 48.68.

“The peso slightly stronger today vs. the US dollar... after the record-high GIR (gross international reserves) data, which fundamentally provide greater support/cushion/buffer for the peso...,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said.

Data released by the Bangko Sentral ng Pilipinas (BSP) on Thursday showed the country’s GIR hit its highest ever in September at $100.5 billion.

The September 2020 GIR level is equivalent to 10 months of imports of goods and payment of services and primary income.

It is also about 9.2 times the country's short-term external debt based on original maturity.

The peso also appreciated as markets anticipate the progress on the last day of the special Congressional sessions for the timely approval of 2021 national budget at the third and final reading before its recess, according to Ricafort.

Since the start of 2020, the local currency has appreciated by a total of P2.01 or 4%.—AOL, GMA News