BSP released $ 3 B in May to support weakening peso
The local currency was at the P42-level in May from P41 in April.
But the peso continued to weaken against the dollar following BSP's projection of a double-digit inflation in June. It closed at P45.01 to the dollar yesterday. Traders said authorities were continuing to temper the rate of peso depreciation by selling more dollars in the open market.
The BSP sterilizes its dollar-buying via FX swaps and when this matures, the central bank has the option of selling the FX in the market or to keep it as dollar reserves. In May some $ 3.8 billion of FX swaps matured, while in June, $ 2.97 billion matured. For the months of July and August, a total of $ 1.98 billion of swaps will mature.
As of end-May, BSP's FX swaps amounted to $ 6.3 billion from $ 9 billion in April, as it continues to return some liquidity into the system.
BSP Governor Amando M. Tetangco Jr. said earlier that the central bank is "reversing" its swap positions as they mature. He said this is the current form of the net outstanding FX swaps of the BSP, which is reversing or winding down.