(Bloomberg) -- The Philippine central bank is trying to rein in speculation in the foreign-exchange market, Governor Eli Remolona said, as the peso weakens toward a record low.

The Bangko Sentral ng Pilipinas intervened in the market on Tuesday in small amounts, Remolona told reporters at an event in Manila late Wednesday. The peso dropped 0.4% to 58.29 per dollar on Thursday and is closing in on the record-low 59 level it reached in 2022.

“In situations in which the peso depreciates, there’s a tendency for stress; the dealers, the traders, they tend to offer big amounts when they’re trying to sell the peso,” Remolona said. “Sometimes the price fluctuates more than before, so we try to control that.”

Bearishness toward the peso increased after Remolona said last week that the BSP may begin cutting its benchmark rate as early as August. The currency has lost 3.5% this quarter, and is the worst performer in emerging markets after the Argentine peso.

Remolona’s other comments included:

  • BSP is not intervening in the foreign-exchange market every day. If BSP does intervene, “it’s very modest”
  • “We want those who really need dollars to get the dollars at reasonable prices”
  • BSP is likely to cut its key interest rate this year by as much as 50 basis points, depending on the data
  • The first rate cut may happen in the third quarter, and the other in the next quarter

 

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