Peso expected to finish 2011 at P42.50:$1

Peso expected to finish 2011 at P42.50:$1

THE METROPOLITAN Bank & Trust Co. said it sees a “roller coaster” trajectory for the peso this year, as remittances and demand for dollars from exporters push and pull the local currency in two directions.
In a market commentary released yesterday, Metrobank, the country’s second largest bank by assets, said the peso could strengthen to P42.50 per dollar in the second quarter as Filipinos living and working abroad send dollars home to finance their families’ education.

“Nevertheless, the peso may well come under renewed pressure and may go back to around the P43-P44 level as demand for dollars picks up ahead of the import season in the third quarter, amid potentially soaring oil and commodity prices,” it said.

With remittances going to pour in again in the fourth quarter, in view of the Christmas season, the peso could strengthen back to around P42.50 per dollar.

“It may well be a roller-coaster ride for the peso this year, albeit at a tighter band as the central bank intervenes and smoothens the peso-dollar volatility. The overall consensus however is one of peso strength going towards yearend regardless of such volatility,” the bank pointed out.

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