Peso closes at 45.98 to $1

MANILA, Philippines - The peso broke into the 45 to $1 level anew yesterday due to the continued weakening of the dollar brought about by uncertainties over the fragile economic recovery in the US.

The peso closed at 45.980 from Tuesday’s 46.115 to a dollar. This was the peso’s strongest level in almost a month after it closed at P45.85 to $1 in Jan. 19.

The peso opened at 46 to $1 but touched an intra-day low of 46.07 before touching an intra-day high of 45.9 to $1. Volume of transaction went up to $717.03 million from Tuesday’s $665.15 million.

Nicholas Kwan, regional head of research for Asia of Standard Chartered Bank (Hong Kong) Ltd., sees the peso strengthening to between 43.5 and 45 to $1 this year due to the continued weakening of the peso against the greenback.

“We see the move coming in the second half after the interest rates are increased,” Kwan stressed.

Currency traders, on the other hand, attributed the continued appreciation of the peso against the greenback to the stable inflation and robust OFW remittan-ces especially during the Christmas season.

A currency trader said more dollars continue to flow into emerging markets including the Philippines.

The Bangko Sentral ng Pilipinas (BSP) sees the amount of money sent home by Filipinos abroad growing by six percent this year.

Overseas Filipino workers’ remittances went up by 5.6 percent to a new record level of $17.35 billion last year from $16.43 billion in 2008 after hitting a new record monthly level of $1.567 billion last January.

On the other hand, the BSP sees inflation averaging about 4.7 percent this year from 3.2 percent last year. This was within the BSP target of between 3.5 percent and 5.5 percent this year.