MANILA, Philippines - The peso will likely strengthen further in the next three months as recent monetary policy adjustments keep the currency stable amid a strong dollar, UK-based investment bank Barclays said.
“[A] slightly more hawkish central bank since the recent changes in monetary policy settings has helped keep the Philippine peso in a stable range,†the bank said in a research note.
“We think the BSP’s appetite to allow significant appreciation is likely quite limited. In recent comments, (BSP) Governor Amando Tetangco has said that the central bank will maintain a strategic presence in the market,†Barclays added.
The bank said it sees the peso at 44.50:$1 exchange rate in a month’s time and a three-month projection at 44:$1.
Moreover, the bank has forecast the local unit returning to 44:$1 in six months’ time and in a year’s time.
The bank noted that despite the positive remittances data that support the country’s strong balance of payments, the peso has been moving sideways.
“Stable remittance growth provides fundamental support for the balance of payments, but the Philippine peso has been moving sideways. Year to date, the Philippine peso has remained flat against the US dollar,†Barclays pointed out.
Cash remittances reached $1.796 billion in February, from $1.799 billion recorded in the first month of the year, the BSP reported on Tuesday.
The peso on Wednesday closed at 44.43:$1 from a 44.49:$1 finish on Tuesday, bouncing back from two consecutive days of weakening against the greenback.