The peso rebounded Tuesday after hitting a new low of 59 a dollar a day earlier, as most financial markets in the region rose on expectations the US Federal Reserve may ease its aggressive interest rate hikes.
The local currency gained P0.35 to close at P58.65 on trading volume of $779 million.
Monetary officials asked individuals “who have the means” to avoid taking advantage of the current trend in the foreign exchange market, saying this kind of activity would not benefit the weakening peso.
The BSP said in a statement it was taking steps to manage any disruption in the financial market.
“We look forward to servicing all legitimate dollar transactions. The USD spot market remains open and active while forwards and repos are available facilities,” the BSP said.
It said these could move the economy forward by supporting the financial leg underpinning economic activity and allowing for an orderly settlement of US dollar obligations.
The BSP said it was committed to enhancing the well-being of Filipinos through a financial system that addresses the funding needs of the public while managing risks.
“There are many reasons why financial markets worldwide have been experiencing notable changes thus far in 2022. Among the pronounced developments is a strong US dollar, which is causing currencies like the Philippine peso to depreciate,” it said.
“We ask those who have the means not to take undue advantage of changing market conditions. This does not help the Philippine peso; it does not help the Philippines. What we can do is to bring all transactions into an organized and accessible formal market that offers consumer protection,” it said.
The BSP said market conditions around the world were challenging, and working together would sustain the functioning financial market while appropriately managing the developing risks.
Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said earlier the dollar’s strength was due to the continued hawkish signals from Fed officials.
He said the other reason for the peso’s weakness was the markets’ anticipation of a faster inflation rate in September which would be released by the Philippine Statistics Authority on Oct. 5.
Inflation likely accelerated to as high as 7.4 percent in September from 6.3 percent in August, the BSP said.
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