Peso returns to P57 level after CPI data

THE PESO climbed back to the P57-a-dollar level on Thursday to post its best finish in more than six weeks as November inflation accelerated in line with expectations, which could affect the Bangko Sentral ng Pilipinas’ (BSP) policy decision this month.

The local unit closed at P57.88 per dollar on Thursday, strengthening by 35 centavos from its P58.23 finish on Wednesday, Bankers Association of the Philippines data showed.

This was the peso’s best close in more than six weeks or since it ended at P57.59 on Oct. 21.

The peso opened Thursday’s session at P58.18 against the dollar. It traded stronger than Wednesday’s close the entire session, as intraday best was at P57.855, while its worst showing was at just P58.21 versus the greenback.

Dollars exchanged decreased to $1.61 billion on Thursday from $1.72 billion on Wednesday.

“The peso resumed its recovery supported by stronger local CPI (consumer price index),” a trader said by phone.

Philippine CPI picked up to 2.5% in November from 2.3% in October, the government reported on Thursday.

Still, this was slower than the 4.1% print in the same month a year ago and was within the BSP’s 2.2%-3% forecast for the month.

The November inflation print matched the median estimate in a BusinessWorld poll of 15 analysts conducted last week.

For the first 11 months, headline inflation averaged 3.2% in the 11-month period, a tad faster than the BSP’s 3.1% full-year baseline forecast but well within its 2-4% annual goal.

The BSP Monetary Board will hold its last policy meeting for the year on Dec. 19.

The peso strengthened amid the seasonal increase in remittances ahead of the holidays, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

For Friday, the trader sees the peso moving between P57.70 and P58.10 per dollar, while Mr. Ricafort expects the peso to range from P57.75 to P58. — A.M.C. Sy