THE Philippine peso had its strongest day in almost two months after returning to the P49 to a US dollar territory on Friday.
The local currency ended the day at $49.85:$1, up 31 centavos from the previous day’s close of P50.16. It hasn’t reached this level since September 15 of this year, when it closed at P49.79 to $1.
“Higher October GIR (gross international reserves) numbers may have helped bolster sentiment in general PHP (Philippine peso) may simply be correcting after a string of positive developments and with bearish bets on the PHP fading,” he stressed. “Concerns that the currency pair would zoom higher to 53 (pesos) appear to have been overblown as inflation decelerated, GDP (gross domestic product) surprised on the upside and GIR levels rose.”
The country’s GIR jumped to a two-month high of $107.94 billion at the end of October, the Bangko Sentral ng Pilipinas said, because of the national government’s foreign currency deposits and the increased gold price.
During the third quarter of this year, the country’s GDP increased by 7.1 percent, bringing the year-to-date average to 4.9 percent, comfortably within the government’s 4 to 5 percent target.
Ruben Carlo Asuncion, chief economist of the Union Bank of the Philippines, for his part, said Friday was a very turbulent trading day, with much of the movement coming from offshore, which influenced onshore dollar-peso prices.
“Prices were largely flat in the morning session, but prices gapped downwards in the afternoon session. Movement was more of position trimming by market players and corporate buying were more pronounced in the morning session,” he noted.