With the peso hitting a 60.10 record low against the United States dollar, attention has turned to how the Bangko Sentral ng Pilipinas (BSP) will manage volatility as the PSE Composite Index (PSEi) fell 0.56 percent to 6,018.62 last Thursday
Before the trading session, BSP reiterated its flexible exchange rate stance—emphasizing that any intervention in the foreign exchange market is meant only to curb excessive volatility and not to defend a specific peso level.
“This is consistent with a flexible exchange rate policy, with intervention limited to tempering large swings that could affect inflation rather than defending any specific level,” BSP said.
The central bank added it acts only to "smooth sharp fluctuations" and maintain orderly market conditions, particularly when movements could affect inflation.
Moreover, Luis Limlingan, Regina Capital Development Corporation head of sales, mentioned the market decline was driven by "early selling pressure" following the peso’s depreciation after the U.S. Federal Reserve kept interest rates unchanged.
"Continued uncertainty in the Middle East, particularly its effect on oil prices, also weighed on investor sentiment," Limlingan noted.
Jonathan Ravelas, Tacandong & Co. senior adviser, warned the peso might stay "above 60" which heightened concerns over potential escalation in the Middle East—following Iran’s reported strike on Qatar’s energy hub.
“[This was] a reaction to retaliation by Iran. Knee-jerk reaction,” Ravelas said.
The peso opened at 59.90 and traded between 59.90 and 60.40, averaging 60.12 for the day.
Foreign exchange trading volume rose to $2.43 billion from $1.77 billion previously.
Meanwhile, the broader All Shares index also declined by 0.56 percent to 3,344.87.
Only the Industrial sector posted gains, up 0.14 percent, while Mining and Oil stocks recorded the steepest drop at 6.70 percent.
Decliners outnumbered advancers, 133 to 61, while 55 shares were unchanged, with total volume reaching 1.87 billion shares.
Written by Ericko Malimban, Insight PH Web Admin
Ericko Malimban, Insight PH Web Admin is a dedicated campus journalist and contributor. Their insightful writing sparks meaningful conversations and keeps the community informed.
