The peso strengthened back to the 40-to-a-dollar territory Friday to hit its highest finish in four weeks as financial markets cheered the decision of Standard & Poor’s to give the Philippines an investment-grade rating.
The peso is expected to stay in the 41-to-a-dollar territory throughout the first semester as the government tries to curb the currency’s appreciation resulting from robust foreign exchange inflows.
As labor militants individuals condemned contractual employment, among other things, in rallies across the country, other people kept themselves busy doing something else on Labor Day: They applied for mostly contractual jobs.
The Bangko Sentral ng Pilipinas has shrugged off concerns over the effects of a weakened Japanese yen on Philippine trade, saying that Filipino exporters may actually benefit from the currency movement.
The peso may continue to appreciate steadily over the next 12 months as it is more stable than it seems, keeping the Philippines the “favorite destination” of investors in Asia excluding Japan, according to DBS Group.
The Bangko Sentral ng Pilipinas is considering reducing further the reserve requirement imposed on banks to temper the peso’s appreciation and bring relief to the troubled export sector.
The peso strengthened on Wednesday following reports that the US services sector grew in February.
The Philippine peso remained one of the fastest appreciating Asian currencies in the first two months of 2013 on the back of a surge in foreign “hot money.”
The Philippine peso remained one of the fastest appreciating Asian currencies in the first two months of 2013 on the back of a surge in foreign “hot money.”
The Bangko Sentral ng Pilipinas said that the country could expect a surge in foreign portfolio investments because of the United States government’s plan to automatically cut public spending worth $85 billion.
Some market players expect the peso to appreciate at an even faster pace this year, but the Bangko Sentral ng Pilipinas sees otherwise, believing that the local currency will become less volatile against the US dollar on the back of rising imports.
The Bangko Sentral ng Pilipinas may further cut the interest rate on special deposit accounts (SDAs) as it hopes to reduce mounting pressures on the peso.
