AFP FILE PHOTO
MANILA, Philippines — The peso moved sideways on Tuesday as the market weighed the impact of a central bank’s move to restrict access to its special deposit account (SDA) facility and favorable outlook on the domestic economy.
The local currency closed at 41.17 against the US dollar, up by a mere 1.5 centavos from the previous day’s finish of 41.185:$1.
Intraday high hit 41.12:$1, while intraday low settled at 41.205:$1.
Volume of trade amounted to $717.1 million from $631.2 million.
The movement of the peso came a day after the Bangko Sentral ng Pilipinas announced it would restrict the entry of funds to the SDA facility. In particular, only money from unit investment trust funds (UITFs) and funds placed in trust accounts with banks will be allowed access to the SDA facility.
This means, money placed in other investment outlets, such as mutual fund, will have to be withdrawn from the SDA. The BSP said banks could fully withdraw covered funds until Nov 30.
The restricted entry to the SDA facility is seen to help temper foreign-exchange inflows, some of which were believed to be going to SDAs.
Nonetheless, traders said rosy projections for the Philippine economy, including expectations that foreign direct investments might start to more significantly pick up, have been helping keep demand for peso-denominated securities.
The likelihood of an increase in FDIs, according to government economists, is anchored on the country’s recent attainment of an investment grade.