Peso climbs to three-year high on eased restrictions

peso climbs to three year high on eased restrictions - Peso climbs to three-year high on eased restrictions

THE PESO strengthened versus the greenback on Tuesday to log a new three-year high following the easing of quarantine measures in Metro Manila and nearby provinces.

The local unit ended trading at P48.625 a dollar yesterday, gaining 8.50 centavos from its P48.71 close on Monday, data from the Bankers Association of the Philippines showed.

This was also the peso’s strongest finish in more than three years or since its P48.59-per-dollar close on Nov. 9, 2016, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

The peso opened the session at P48.66 per dollar, which was also its weakest for the day. Meanwhile its strongest showing was at P48.61 against the greenback.

Dollars exchanged more than doubled to $875.4 million from the $423.3 million recorded on Monday.

The local currency’s appreciation came following the announcement of looser lockdown measures for Metro Manila and nearby areas starting Wednesday, a trader said.

President Rodrigo R. Duterte on Monday said the National Capital Region as well as  surrounding provinces Bulacan, Cavite, Laguna and Rizal will be back under general community quarantine starting Aug. 19 until Aug. 31. This means more industries will be allowed to operate.

The peso was also supported by positive market sentiment after better-than-expected remittance data “that may help improve prospects for economic recovery and valuations,” said Mr. Ricafort.

Cash remittances coursed through banks rose 7.7% to $2.465 billion in June, its fastest growth in five months and snapping a three-month contraction due to the pandemic, data released by the central bank on Monday showed.

Year to date, remittances declined by 4.2% to $14.019 billion. The Bangko Sentral ng Pilipinas expects remittances to drop by 5% this year due to the coronavirus pandemic.

For today, Mr. Ricafort gave a forecast range of P48.55 to P48.70 per dollar while the trader said he expects the local unit to move within the P48.50 to P48.70 band. — L.W.T. Noble

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