{"id":19475,"date":"2024-06-27T03:01:40","date_gmt":"2024-06-27T03:01:40","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/peso-to-remain-weak-as-bsp-appears-less-likely-to-defend\/"},"modified":"2024-06-27T03:01:40","modified_gmt":"2024-06-27T03:01:40","slug":"peso-to-remain-weak-as-bsp-appears-less-likely-to-defend","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/peso-to-remain-weak-as-bsp-appears-less-likely-to-defend\/","title":{"rendered":"Peso to remain weak as BSP appears less likely to defend"},"content":{"rendered":"
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THE PESO may remain weak against the dollar as the Bangko Sentral ng Pilipinas (BSP) is not expected to \u201cstrongly\u201d defend the currency amid its recent dovish policy signals, Bank of America (BofA) Global Research said.<\/p>\n

\u201c(The Philippine peso) remains on the weaker side, taking cues from the BSP\u2019s dovish turn in the last policy meeting and lack of concern on the FX (foreign exchange) moves,\u201d it said in a report.<\/span><\/p>\n

BofA Global Research said the \u201cbearish positioning could slow further weakness\u201d but the BSP appears less likely to defend the peso from falling to P59 against the US dollar.<\/p>\n

\u201cGeopolitical concerns need to be watched as another trigger for further weakness,\u201d it added.<\/p>\n

The peso closed at P58.86 against the dollar on Wednesday, weakening by nine centavos from its P58.77 f<\/span>inish on Tuesday. This was its weakest f<\/span>inish in over 20 months or since its P58.87-per-dollar close on Oct. 24, 2022.<\/p>\n

The BSP earlier said that the peso\u2019s recent performance is \u201ctemporary\u201d given the expected delay in the US Federal Reserve\u2019s policy easing.<\/p>\n

BSP Governor Eli M. Remolona, Jr. had also said that it is a case of a \u201cstrong dollar\u201d and not a weak peso due to the tensions in the Middle East.<\/p>\n

To keep markets orderly and control speculation, the BSP said that it has intervened in the foreign exchange market in \u201cmodest\u201d amounts.<\/p>\n

\u201c(Philippine peso\u2019s) weakness may ref<\/span>lect concerns on a weak growth outlook which has also led to a dovish turn in BSP\u2019s policy guidance,\u201d BofA said.<\/p>\n

\u201cThe governor\u2019s comments about the possibility of a cut in the August meeting may have changed market expectations on the policy priorities between supporting the domestic economy vs. preserving FX stability,\u201d it added.<\/p>\n

Mr. Remolona earlier signaled the possibility of starting the easing cycle by August, for a total of 25-50 bps worth of cuts for the entire year.<\/p>\n

\u201cLower rates in the Philippines have raised the chances of even narrower interest-rate buf<\/span>fer against (US dollar) rates, which may impact the hedging behavior of corporates,\u201d BofA said, adding pressure could go up if the US dollar strength picks up or US yields rise again. <\/span><\/p>\n

Meanwhile, BofA said that elevated inflation remains the top risk facing the Philippines.<\/span><\/p>\n

\u201cFood price shock and higher commodity prices in general remain the key risk for the Philippines, leading to a widening of the twin def<\/span>icits,\u201d it said.<\/p>\n

Inflation could possibly breach the 2-4% target band until July, according to the central bank. The BSP expects inflation to average 3.5% for the full-year 2024.<\/p>\n

\u201cGeopolitical risks due to border clashes with China could impact investment flows,\u201d BofA added. \u2014 Luisa Maria Jacinta C. Jocson <\/b><\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

THE PESO may remain weak against the dollar as the Bangko Sentral ng Pilipinas (BSP) is not expected to \u201cstrongly\u201d defend the currency amid its recent dovish policy signals, Bank of America (BofA) Global Research said. \u201c(The Philippine peso) remains on the weaker side, taking cues from the BSP\u2019s dovish turn in the last policy [\u2026]<\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[1],"tags":[4442,5796,14644,3524,1015,252,15718,7455,5083],"class_list":["post-19475","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-appears","tag-bsp","tag-bworldonline","tag-defend","tag-less","tag-likely","tag-peso","tag-remain","tag-weak"],"yoast_head":"\nPeso to remain weak as BSP appears less likely to defend - Energy Buzz<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/energybuzz.ph\/peso-to-remain-weak-as-bsp-appears-less-likely-to-defend\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Peso to remain weak as BSP appears less likely to defend - 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