Effective communication of the Bangko Sentral ng Pilipinas to the market about the successive policy and reserve requirement cuts this month helped stabilize the performance of the peso against the US dollar compared to other currencies in the region
ING Bank Manila senior economist Nicholas Mapa said in a report that despite the “double-barreled” easing from the BSP, followed up by a reduction in RRR for smaller banks, the peso has continued to outperform its regional peers.
“… BSP’s ability to communicate its policy bias to the market has gone a long way to helping keep the currency stable despite the dovish bias. With market believing inflation to be tame and BSP not behind the curve, further easing moves by the BSP may be welcomed should they be communicated effectively to the market,” he said.
“Timing of the RRP cut and RRR redux rather than sequence may have had more weight in FX performance,” Mapa said.
The peso closed at 52.22 against the US dollar Monday, down from 52.16 Friday.