THE PESO was flat against the dollar on Tuesday as players stayed on the sidelines ahead of the Bangko Sentral ng Pilipinas’ (BSP) policy meeting.
The currency closed at its record low of P63.09 versus the greenback for the second straight day, Bankers Association of the Philippines data showed.
The local unit opened Tuesday’s session slightly stronger at P63.03 per dollar. It returned to the P62 level during the day, hitting a high of P62.98, while its worst showing was at P63.11 versus the greenback.
Dollars traded went down to $1.36 billion from $1.778 billion.
“The peso was unchanged from market uncertainty over the possible action from the BSP policy meeting this week, which could affect the strength of the local currency,” a trader said in a Viber message.
A BusinessWorld poll showed 20 of 22 economists expect the Monetary Board to raise rates by 25 basis points (bps) for a fourth straight time at its meeting on Thursday to bring the policy rate to 5.25%.
This would match the benchmark rate set in June 2025 and will be the highest in one-and-a-half years since the 5.5% in April 2025.
The BSP has lifted benchmark borrowing costs by 75 bps since April.
The trader said the currency may stay rangebound leading up to Thursday’s policy review.
Less hawkish signals from the US Federal Reserve also weighed on the dollar, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The Fed meets Oct. 27-28 and is expected to keep rates steady at 3.75%-4%. Fed funds futures traders see the Fed holding rates steady at this month’s meeting and are pricing in 91% odds of a hike in December, Reuters reported.
Recent comments from Fed officials, including Chairman Kevin Warsh, suggest policymakers are in no rush to hike rates again.
For Wednesday, the trader sees the peso moving between P63 and P63.20 against the dollar, while Mr. Ricafort expects it to range from P62.95 to P63.15. — A.M.C. Sy