MANILA, Philippines?The peso increased slightly in value on Thursday as expectations of rising interest rates attracted the entry of more portfolio investments.
The local currency closed at 43.10 against the US dollar, up by 3 centavos from Wednesday's finish of 43.13.
Intraday high stood at 43.05:$1, while intraday low settled at 43.19:$1. Volume of trade slid to $914.43 million from $1.436 billion previously.
Traders said there has been a common expectation among investors that Asian central banks, including the Bangko Sentral ng Pilipinas, would continue to hike interest rates to fight inflationary pressures.
As such, investors expect yields on securities to rise in the months ahead as well. This prompts them put more funds in emerging economies like the Philippines.
On Wednesday, the central bank of China hiked its rates on the back of rising consumer prices in China. The Bangko Sentral ng Pilipinas did the same last March 24 amid projections of potential breaching of the inflation target for the year.
Traders said investors would like to take advantage of the trend of rising interest rates in developing Asia by placing more funds in securities from the region.