THE PESO rebounded against the dollar on Wednesday after the Bangko Sentral ng Pilipinas (BSP) delivered another rate cut.
The local unit closed at P57.70 per dollar on Wednesday, strengthening by 16.5 centavos from its P57.865 finish on Tuesday, Bankers Association of the Philippines data showed.
The peso opened Wednesday’s session weaker at P57.90 against the dollar. Its intraday best was at its closing level of P57.70, while its worst showing was at P57.92 versus the greenback.
Dollars exchanged went down to $1.38 billion on Wednesday from $1.47 billion on Tuesday.
“The market mostly moved sideways ahead of the BSP rate decision and was muted when the BSP announced the 25-basis-point (bp) cut. Traders mostly absorbed and repositioned following the rate decision,” a trader said by phone.
The Monetary Board on Wednesday cut benchmark interest rates by 25 bps for a second straight meeting, as expected by 16 of 19 analysts in a BusinessWorld poll, as price pressures remain manageable.
This brought its policy rate to 6%. The interest rates on the BSP’s overnight deposit and lending facilities were also adjusted to 5.5% and 6.5%, respectively.
The BSP in August kicked off its easing cycle with a 25-bp reduction, marking its first rate cut in nearly four years.
The peso rose against the dollar as it was supported by signs of easing tensions in the Middle East after Israel said it would not target Iran’s oil and nuclear facilities, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.
For Thursday, the trader sees the peso moving between P57.50 and P57.90 per dollar, while Mr. Ricafort expects it to range from P57.60 to P57.80. — A.M.C. Sy
