Peso recovers but still at 19-month low

The Philippine peso regained ground against the US dollar on Friday, but still trailed within a 19-month low following news of a rice import tariff rate cut which could support a case for a possible monetary easing.

The local unit gained 9.1 centavos to close at P58.52:$1 from $58.611:$1 on Thursday.

In a foreign exchange commentary, Rizal Commercial Banking Corp. Chief Economist Michael Ricafort said the peso corrected slightly by 0.2% but is still at its 19-month low, or since November 7, 2022, when the exchange rate finished at P58.58:$1.

Ricafort said the reduced rice import tariffs to 15% from 35% could reduce rice prices and “could help reduce overall inflation and help support possible local policy rate cuts in the coming months.”

“Going forward, the performance of the US dollar/peso exchange rate would partly be a function of intervention/defense as consistently seen over the past 1.5 years,” Ricafort said.

Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. earlier said the central bank intervenes in the foreign exchange market when the peso is “under stress” or when it finds some “dysfunction in the market.” — DVM, GMA Integrated news