THE PESO rebounded versus the greenback on Tuesday as oil prices fell while inflation eased.
The local unit closed at P48.57 per dollar yesterday, gaining 6.5 centavos from its P48.635 finish on Monday, data from the Bankers Association of the Philippines showed.
The peso opened Tuesday’s session at P48.58 versus the dollar. Its weakest showing was at P48.60 while its strongest was at P48.53 against the greenback.
Dollars exchanged dropped to $559.3 million on Tuesday from $637.2 million on Monday.
The peso gained on the back a decline in oil prices, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.
“[This] could help reduce the country’s oil import bill and the demand for dollars to pay for oil imports,” Mr. Ricafort said in a text message.
Reuters reported that global oil prices dropped 4% on Monday amid expected increase in output major exporting economies and with the threat of a new infection wave being a risk to recovery in the US. Brent crude for June was down by $2.71 or 4.2% to $62.15 per barrel on Monday. Meanwhile, the US West Texas Intermediate price fell 4.6% or $2.80 to $58.65 a barrel.
Meanwhile, a trader attributed the peso’s appreciation to data showing slower inflation in March.
Inflation eased in March after climbing for five consecutive months, the Philippine Statistics Authority reported on Tuesday.
Headline inflation was at 4.5% in March, slowing from the 4.7% print in February but faster than the 2.5% seen in March last year.
It fell within the 4.2-5% estimate given by the Bangko Sentral ng Pilipinas (BSP) for the month
Inflation averaged at 4.5% for the first quarter, beyond the BSP’s 2-4% target range as well as its 4.2% forecast for 2021.
For today, Mr. Ricafort expects the local unit to move within the P48.53 to P48.63 levels versus the dollar, while the trader gave a forecast range of P48.45 to P48.65. — LWTN with Reuters