Peso drops as investors pocket gains and BSP curbs appreciation

AFP PHOTO

MANILA, Philippines—The peso fell on Wednesday in what market players attributed partly to profit-taking by investors and efforts by the central bank to curb the local currency’s appreciation.

The peso closed at 40.625 against the US dollar, down by 5.5 centavos from the previous day’s finish of 40.57:$1.

Intraday high hit 40.6:$1, while intraday low settled at 40.66:$1.

Volume of trade amounted to $954.5 million from $1.05 billion previously.

The peso’s drop on Wednesday came after the local currency hit its highest in nearly five years on Tuesday. Some fund owners were believed to have sold their peso holdings to generate profit after the local currency’s rise against the greenback.

Traders also said the Bangko Sentral ng Pilipinas might be purchasing dollars from the market to prevent a much steeper rise of the local currency.

The BSP allows the peso’s value to be largely determined by the market, but it intervenes from time to time to avoid excessive volatility of the exchange rate.