Peso gains versus dollar after BSP signals intervention

The Philippine peso edged up against the US dollar on Friday following the Bangko Sentral ng Pilipinas’ (BSP) pronouncement that it intervenes in the foreign exchange market to prevent the local currency from further depreciation.

The local unit closed at P58.61:$1, up 14 centavos from Thursday’s close of P58.75:$1.

In a commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso’s latest close was a “good signal” that it stabilized mostly at the P58.60-P58.80 levels.”

Ricafort said the local currency’s strength came “a day after the BSP signaled possible intervention in the forex market if needed.”

On Thursday, BSP Governor Eli Remolona Jr. said that the central bank has been watching the peso, adding that “we don’t want it to depreciate too sharply… we occasionally intervene.”

The BSP chief early this month said that the central bank intervenes in the foreign exchange market when the Philippine peso is “under stress” amid the local currency’s recent decline to a 19-month low.

Ricafort said the peso also gained footing after the latest BSP signals a more dovish stance in terms of the earliest possible rate cut.

Remolona, on Thursday, also signaled that an interest rate cut is “somewhat more likely than before” in August. — RSJ, GMA Integrated News