Peso slightly up on news of PH’s huge foreign reserves in January

MANILA, Philippines—The peso ended Thursday’s trading slightly higher than previous day’s close after the central bank reported that the country’s foreign exchange reserves hit another all-time high in January.

The local currency closed at its intraday high of 40.635 against the US dollar, up by 2 centavos from Wednesday’s finish of 40.655:$1.

Intraday low settled at 40.725:$1. Volume of trade amounted to $847.3 million from $671.5 million previously.

The minimal rise of the peso came following the release of a report by the Bangko Sentral ng Pilipinas, saying that the country’s gross international reserves reached a new historic high of $85.76 billion in January.

The amount was enough to cover for a little over one year worth of the country’s import requirements and was nearly six times the combined outstanding debts of private and government entities in the Philippines to foreign creditors maturing within the short term.

The rise in the GIR substantiated market expectations that dollar inflows—mainly remittances, foreign portfolio investments, and foreign investments in business process outsourcing—to the Philippines could grow further this year.

Economists said expectations of robust dollar inflows this year have been boosting outlook on the peso, which would likely strengthen further after appreciating by nearly 7 percent against the greenback in 2012.

Such an outlook has been fueling appetite for peso-denominated securities, traders said.