Quantcast
Latest Stories

Peso sustains strength vs US dollar

Local currency is 3rd fastest rising in Asia

By

Backed by a favorable sentiment on the Philippine economy, the peso sustained its uptrend, making itself the third fastest-rising Asian currency in the first quarter.

Data from the Bangko Sentral ng Pilipinas showed that the peso inched up further against the US dollar by 0.61 percent in the first three months of the year as it closed at 40.8:$1 on March 27, the last trading day before the Lenten break.

Only the Thai baht and the Indian rupee surpassed the peso’s rise during the period, appreciating by 4.69 percent and 0.97 percent against the dollar, respectively.

The Chinese yuan rose by 0.30 percent, with China now allowing more flexibility in the exchange rate as economists point out the need for the world’s second-biggest economy to shift from a policy of driving exports to boosting domestic demand.

Meantime, other actively traded Asian currencies depreciated against the US dollar in the first quarter.

Indonesian rupiah fell by  0.79 percent; Malaysian ringgit by 1.26 percent; Singaporean dollar by 1.69 percent; Taiwan dollar by 2.87 percent; Korean won by 3.75 percent; and Japanese yen by 8.86 percent.

The peso’s uptrend came amid the bullish outlook of financial markets on the Philippines, which has just received its first-ever investment grade from a major international credit rating agency.

Fitch Ratings on Wednesday announced it has raised the credit rating of the Philippines by a notch to BBB-, which is the minimum investment grade level.

The credit watchdog cited several factors for its decision. These include significant improvement in the Philippine government’s fiscal situation over the past decade, the buildup in the country’s foreign exchange reserves, and sustained growth of the economy despite the drag caused by debt problems in industrialized countries.

After hovering in the P40-to-a-dollar territory for most of the first quarter, the peso actually fell back to the P41 level on Tuesday because of the crisis in Cyprus that has caused jitters in financial markets worldwide. The following day, however, the peso bounced back to the P40 level because of the good news from Fitch.

Market players expect the peso to remain relatively strong in 2013 after its strong performance the previous year. They said the investment rating is expected to further boost appetite for peso-denominated securities.

In 2012, the peso registered the second fastest pace of appreciation against the greenback, next to the Korean won, as remittances grow and the positive outlook on the Philippines pushed up demand for peso-denominated assets. The peso had risen by nearly 7 percent throughout 2012 as it closed at 41.05:$1 on the last trading day of the year.

Demand for peso-denominated stocks and bonds has pushed the Philippine Stock Exchange index to record highs and interest rates on government securities to record lows.

However, the rise of the peso also has its disadvantages. The country’s export sector cites the rise of the local currency for making Philippine goods more expensive for foreign buyers and, therefore, less price competitive.


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Business , currencies , fitch ratings , Philippine peso



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • Tens of thousands travel by sea this Holy Week
  • Police: Dad smothered toddler to play video game
  • 7 killed in shooting in China-Vietnam border
  • Chinese trade group to mediate shoe factory strike
  • Malaysia, Australia in deal on black box custody–report
  • Sports

  • Pacquiao shorts in Bradley fight sold for P1.7M in LA auction
  • Ryu pitches Dodgers past Giants
  • Alonso sets the pace in Chinese GP practice
  • Heat seek Three-peat but Spurs, Pacers top seeds
  • Can Spurs get back at Heat? Can they survive West?
  • Lifestyle

  • Levine designs womenswear with help from fiancee
  • Gabriel Garcia Marquez, Nobel laureate, dies at 87
  • Ford Mustang turns 50 atop Empire State Building
  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • Entertainment

  • EXO postpones release of mini album ‘Overdose’
  • ‘X-men’ filmmaker slams ‘fabricated’ sex attack claims
  • Singer Chris Brown’s bodyguard on trial in DC
  • Whoopi Goldberg debuts as marijuana columnist
  • ‘X-men’ director accused of sex assault on teen boy
  • Business

  • Italy sells luxury state cars on eBay
  • Asian shares mostly up in quiet trade
  • Dollar up in Asia on US jobs data, Ukraine deal
  • Barbie doll has a problem
  • Oil prices mixed ahead of long Easter weekend
  • Technology

  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Filipinos #PrayForSouthKorea
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • DoH denies Filipino nurse no longer positive for MERS virus
  • WHO warns vs spread of MERS-Cov, urges vigilance in taking precautions
  • Last call for nominations to ’14 Presidential Awards
  • San Francisco business coalition slams proposed tax on sugary drinks
  • A ‘time-travel’ production of ‘Les Miserable’ at Stanford
  • Marketplace