THE PESO strengthened versus the greenback for the second straight day as remittances rose and as oil prices dropped.
The local unit closed at P52.31 per dollar on Wednesday, appreciating by 10.5 centavos from its P52.415 finish on Tuesday, based on Bankers Association of the Philippines data.
The peso opened Wednesday’s session at P52.375 versus the dollar, which was also its weakest showing. Meanwhile, its intraday best was at P52.20 against the greenback.
Dollars exchanged increased to $1.046 billion on Wednesday from $1.01 billion on Tuesday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message said the continued increase in remittances boosted the peso.
Data released by the Bangko Sentral ng Pilipinas on Tuesday showed cash remittances rose by 2.5% to $2.668 billion in January from $2.603 billion a year earlier. This marked the 11th straight month of annual growth in these inflows.
The central bank expects remittances to grow by 4% in 2022.
Meanwhile, a trader in an e-mail attributed the peso’s appreciation to the decline in international oil prices as the diplomatic efforts to end the Russia-Ukraine conflict seemed to have some progress.
Reuters reported that oil prices were down by more than 6% on Tuesday, reaching their three-week lows after some progress with the diplomatic talks between Moscow and Kyiv. A Ukrainian negotiator said both parties are negotiating on a ceasefire and the withdrawal of Russian troops.
Brent futures on Tuesday dropped by $6.99 or 6.5%, to settle at $99.91 a barrel. Meanwhile, US West Texas Intermediate (WTI) crude declined by $6.57 or 6.4%, to settle at $96.44 a barrel.
Brent fell as low as $97.44 and WTI hit $93.53, their lowest since Feb. 25. Oil prices have been more volatile since Russian forces invaded Ukraine on Feb. 24.
For Thursday, Mr. Ricafort gave a forecast range of P52.15 to P52.35, while the trader expects the local unit to move within P52.20 to P52.45 per dollar. — L.W.T. Noble with Reuters