MANILA, Philippines—The peso strengthened further on Wednesday as foreign investors reacted positively to reports that Greece may have increased its chances of getting another bailout package from the European Union.
The local currency closed at 43.36 against the US dollar on Wednesday, up by 10 centavos from 43.46:$1 the previous day.
Intraday high hit 43.33:$1, while intraday low settled at 43.45:$1. Volume of trade amounted to $816.97 million, up from $685.25 million.
Traders said news reports that Greece’s Prime Minister George Papandreou got a vote of confidence from Greece’s Parliament meant that proposals for the Greek government to implement budget cuts would likely be approved.
The European Union has already made a statement saying it is bent on giving Greece another $12-billion bailout package after the first multibillion-dollar aid was recently given. The second bailout, however, depends on the ability of Greece to implement fiscal reforms, including austerity measures.
Traders said the positive developments in Greece appeased concerns over the country’s debt situation and tempered worries that it might default on its loans.
A default by Greece could prompt investors to shy away from investing in any emerging economy, even those in Asia, such as the Philippines. On the other hand, traders added, containing the debt situation in Greece would lift risk appetite of investors for securities issued by emerging markets.