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Philippines: Peso strengthens to P50 to a dollar
THE Philippine peso (PHP) had its best day in a week as a result of international and domestic factors, returning to the P50 to a US dollar (USD) region on Wednesday.
The local currency appreciated by 34 centavos from the previous day’s close of P51.30 to $51:$1. It hasn’t been this strong since December 28, when it closed at 50.46:$1.
“The past two days have been of the USD strength narrative as the market anticipates the US Fed (Federal Reserve) to stick with at least two rate hikes this 2022 despite the surge in Covid cases globally,” Ruben Carlo Asuncion, chief economist of the Union Bank of the Philippines, stressed.
“Onshore, lower-than-expected December headline inflation somehow momentarily cushioned the PHP’s weakness during this mid-week trading day,” he added.
According to the Philippine Statistics Authority, the country’s headline inflation rate fell to 3.6 percent in December of last year, the lowest in a year.
It is within the Bangko Sentral ng Pilipinas’ estimate range of 3.5 to 4.3 percent, but slower than the 4-percent average expectation of economists polled by The Manila Times.
Other analysts anticipate the Philippine peso to drop even further against the US dollar this year as economic activities recover. They forecast the peso to end 2022 at P51-52:$1, after closing 2021 at P50.99 to the US dollar.
This year, the government expects the peso-US dollar exchange rate to be P48-53:$1.
Source: https://www.manilatimes.net/2022/01/06/business/top-business/peso-strengthens-to-p50-to-a-dollar/1828316