AFP FILE PHOTO
MANILA — Recovering from the previous day’s low close, the peso strengthened considerably against the US dollar, closing at 50.530 on Tuesday after Monday’s fresh low.
The local currency dropped to 50.870 and climbed to 50.530 within the day after it opened at 50.750, even weaker than the previous day’s close at 50.695.
Total volume traded meanwhile surged to $629 million from Monday’s $439 million.
ING Bank Manila senior economist Joey Cuyegkeng attributed the peso’s recovery to higher capital equipment imports as well as “some USD supply entering the market coupled with some profit taking of market dealers.”
On the other hand, higher-than-expected trade deficit caused the intraday’s weakness, according to the senior economist.
“But demand for USD is likely to remain on an uptrend in a largely domestically driven economy. The overall trend of moderate weakness remains intact,” Cuyegkeng added.
Meanwhile, Bangko Sentral ng Pilipinas Gov. Nestor Espenilla Jr. said that a lot of factors has affected the peso movement, including external ones.
“[V]olatility is there because of policy uncertainties, [there are your] political tensions, there are trade issues…there are many things that reflect them so it’s very difficult to say,” said Espenilla at the sidelines of a BSP stakeholders event on July 11.
“It’s actually just reflecting market conditions and underlying fundamentals so we see nothing particularly unusual about it. It’s the nature of the exchange rate to fluctuate and as far as the BSP’s concerned, we’re there, we’re managing, there’s no excessive volatility,” he added.
“There will be days when we are higher, there will be days when we are weaker. That’s the nature of these prices, so don’t look at it on a day to day basis. Don’t stress over it,” the central bank governor said. (Report filed by Frances Josephine E. Espeso, Inquirer trainee) SFM