Peso up on reports of growth projections in Asia

MANILA, Philippines—The peso inched up on Wednesday as projections of growth in emerging Asia and anticipated decline in interest rates are seen to help accelerate expansion of the domestic economy and to cushion the ill-effects of the prolonged crisis in the eurozone .

The local currency closed at its intraday high of 43.4 against the US dollar, up 22 centavos from Tuesday’s finish of 43.62:$1.

Intraday low settled at 43.63:$1. Volume of trade amounted to $1.45 billion, up from $974.17 million previously.

Traders said the appreciation of the peso, as well as of other Asian currencies, was largely due to anticipated reduction in domestic interest rates and growth prospects for China.

The Bangko Sentral ng Pilipinas has hinted it would soon cut key policy rates, probably during its Monetary Board meeting Thursday, as a response to the need to fast-track growth of the Philippines following its slowdown in 2012.

A cut in the policy rates, which influence domestic interest rates, is seen to help boost demand for bank loans, thereby lifting consumption and investments.

Traders also said expectations of a similar rate cut in China would sustain demand from Asia’s biggest economy. Strong demand from China, one of the biggest export markets for goods from the Philippines and other Asian countries, is seen to help counter the adverse impact on export earnings of the debt crisis in the eurozone.