The Philippine peso edged up on Tuesday, driven by lower global oil prices and a slower-than-expected inflation rate in June.
The currency rose by 5.6 centavos to close at P61.435 per dollar from P61.491 on Monday.
Dollars traded increased to $1.377 billion from $876.75 million previously, as the local unit opened Tuesday's session stronger at P61.40 versus the greenback.
The peso moved within a narrow range, reaching a high of P61.39 and a low of P61.455.
Chief Economist Michael L. Ricafort attributed the peso's gain to better-than-expected local headline inflation for the second straight month at 6.4% in June.
He also noted that the sharp decline in global crude oil prices recently, due to the ceasefire between the United States and Iran, led to rollbacks in local pump prices, supporting the peso.
Ricafort added that slower inflation tends to improve the peso's purchasing power, making it a positive factor for the currency.
The peso exchange rate was relatively stable versus the US dollar recently, amid possible intervention at the P61.60-P61.70 levels and possible future BSP rate hikes to help stabilize the peso and manage inflation expectations.
Philippine headline inflation slowed to 6.4% in June, below the 6.6% median estimate and the second straight month of deceleration.
The inflation rate was the slowest since March's 4.1% pace, but marked the fourth month in a row that inflation breached the BSP's 2-4% tolerance band.
The consumer price index averaged 4.8% in the first semester, also above the BSP's goal.
BSP Governor Eli M. Remolona, Jr. said the economy can handle one more 25-basis-point rate hike as growth is expected to rebound in the coming months.
The Monetary Board has raised benchmark borrowing costs by a total of 50 bps since April to curb spiraling prices and keep inflation expectations anchored.
For Wednesday, Ricafort forecast the peso could trade at P61.35 to P61.55 against the dollar.
