Peso rebounds, but still at P58:$1 level

The Philippine peso rebounded against the US dollar on Wednesday after three consecutive trading days of depreciation, following remarks from the Bangko Sentral ng Pilipinas (BSP) indicating possible interventions on the foreign exchange market.

The local currency gained 21 centavos to close at P58.06:$1, also the intraday low, versus Tuesday’s finish of P58.27:$1 which was the worst showing in 18 months since November 8, 2022’s finish of P58.275:$1.

According to Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort, Wednesday’s trading session was swayed by the BSP remarks, along with other factors overseas.

“The US dollar/peso exchange rate finally corrected lower, considered a healthy downward correction… after reiterations lately about possible intervention in the local foreign exchange market to smoothen any excessive volatility, and restore order, if necessary,” he said in a mobile message.

The BSP said the peso’s earlier weakness was in line with the performance of other currencies in the region,  but it continues to monitor the market and “will participate” when necessary.

Ricafort said Wednesday’s session was also impacted by the improved market risk appetite both in the United States and across the globe, which could support sentiment on emerging markets such as the Philippines.

This comes as US stock markets hit record highs, and Federal Reserve governor Christopher Waller saying that data over the next three to five months could allow lower borrowing costs by the end of the year.

Locally, the benchmark or the target reverse repurchase rate is at 6.5%, the highest in 17 years since it was kept at 7.5% in May 2007, with the risk-adjusted inflation outlook set at 3.8%. — BM, GMA Integrated News