BSP Rhetoric Aids PHP Rebound

The Philippine currency is outperforming the rest of the region today. USD/PHP currently sits at 55.55 currently, around 0.40% firmer in PHP terms versus yesterday's closing levels. The pair now sits ~1.50% off highs from early last Thursday (56.385). Mid-April lows between 55.07/55.37 could now be targeted by the market.

• Comments from BSP Deputy Governor Dakila from late on Monday that the central bank sees PHP as broadly stable over the medium term have helped stabilize sentiment. The Deputy Governor added that economic managers see USD/PHP in a 53-57 range this year, which is down from 55-59 seen in December.
• The Deputy Governor stressed the central bank remains committed to a market-determined exchange rate and noted several supports including services exports and remittances.
• This, along with weekend comments from the central bank, that FX levels were being monitored, has no doubt helped sentiment. It overrides comments from other officials late last week that a weaker FX rate could help boost FX competitiveness.
• Some retreat in oil prices is also likely to be helping at the margins.