Peso drops further due to month-end dollar demand

By AMCS with Reuters | BusinessWorld
April 27, 2023

THE PESO declined further against the dollar on Thursday due to month-end corporate demand for the greenback.

The local currency closed at P55.72 versus the dollar on Thursday, depreciating by 10 centavos from Wednesday’s P55.62 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Thursday’s session at P55.68 per dollar, which was also its intraday best. Its worst showing for the day was at P55.81 versus the greenback.

Dollars traded went down to $1.186 billion on Thursday from the $1.23 billion recorded on Wednesday.

“The peso weakened versus the dollar for the second straight day on suspected month-end corporate demand,” a trader said in a Viber message.

Market concerns over First Republic Bank after its stock price reached a new low also continued to pull the peso down, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Troubles at US lender First Republic Bank continued to unnerve investors amid concerns that growth in the world’s biggest economy could surprise on the downside, Reuters reported.

Overnight, the woes of First Republic continued, with its market value briefly sinking as much as 41% to about $888 million, a far cry from its peak of more than $40 billion in November 2021.

Investors are waiting to see whether it can find buyers for assets and engineer a turnaround after CNBC reported that US government officials are currently unwilling to intervene.

The local unit also weakened as the markets awaited local budget balance data and US gross domestic product and personal consumption expenditures reports, Mr. Ricafort added.

For Friday, the trader sees the peso trading between P55.50 and P55.75 against the dollar, while Mr. Ricafort expects it to move from P55.60 to P55.80.