The Bangko Sentral ng Pilipinas (BSP) will allow the market to determine the foreign exchange rate but it will intervene when necessary to smoothen volatility, its governor said yesterday.
The peso declined as much as 0.5 percent to 58.130 per US dollar earlier on Tuesday, its lowest since November 2022, joining other Asian peers in retreating against the dollar.
“The BSP will participate in the market when necessary to smoothen excessive volatility and restore order during periods of stress,” BSP Governor Eli Remolona said in a statement.
Remolona said the dollar continued to strengthen against other currencies after the Federal Reserve signaled a delay in easing interest rates.
The peso’s weakening against the dollar also followed his remarks last week that the central bank could ease rates as early as August.
The BSP last week kept its benchmark rate unchanged for a fifth straight meeting at 6.5 percent , in line with market expectations.
The Philippine Stock Exchange index was down 49.12 points to 6,633.66, a 0.74 percent drop.
Mikhail Philippe Plopenio, analyst at Philstocks Financial Inc., said investors were worried over the weakness of the local currency against the dollar.
“Also, the lack of strong positive leads weighed on the market,” he said.
The broader All Shares index was down 12.93 points or 0.36 percent to 3,535.77.
Losers edged gainers 99 to 86 with 48 stocks unchanged. Trading turnover reached P9.8 billion.
The peso closed at 58.27 to the dollar, up from 57.90 on Monday. The currency opened at 57.97, hit a high of 57.97 and a low of 58.28. Trading turnover reached $1.62 billion.
The peso dropped to its lowest against the dollar in intraday since Nov. 10, 2022 when it hit 58.22 on intraday trading.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. said this could lead to higher importation prices/costs and could lead to some pick up in overall inflation.
Most actively traded International Container Terminal Services Inc. was up P7.60 to P347. Ayala Land Inc. was down P0.70 to P29. SM Investments Corp. was down P12 to P862. SM Prime Holdings Inc. was down P0.20 to P29. BDO Unibank Inc. was down P2 to P138. Ayala Corp. was down P7.50 to P614. Century Pacific Food Inc. was steady at P35. Metropolitan Bank and Trust Co. was down P0.75 to P69.75. OceanaGold Philippines Inc. was up P1.14 to P14.18. PLDT Inc. was down P27 to P1,436.
