Peso hardly moves due to global concerns
MANILA, Philippines—The peso moved sideways on Tuesday as investors weighed concerns over a weak global economy and speculations that Asian central banks will inject more liquidity in their economies to boost growth.
The local currency closed at 41.46 against the US dollar, up by just one centavo from the previous day’s finish of 41.47:$1.
Intraday high hit 41.36:$1, while intraday low settled at 41.49:$1.
Volume of trade amounted to $744.4 million from $786.1 million previously.
The minimal movement of the peso came following the release of a report by the International Monetary Fund that it has cut its global economic growth outlook for this year from 3.5 to 3.3 percent given the prolonged economic problems in the United States and the eurozone.
The IMF said in its latest “World Economic Outlook” that the anemic performance of the US economy and the crisis in the eurozone would pull down demand for goods from, and thus export earnings of, developing countries like the Philippines.
For the Philippines, the IMF is keeping its 4.8-percent growth projection for this year.
Traders said that besides concerns over a weak global economy, investors were likewise influenced by the belief that Asian central banks, including the Bangko Sentral ng Pilipinas, would keep interest rates low so that growth in credit, and thus consumption and investments, would be boosted.
BSP Governor Amando Tetangco Jr. was quoted as saying last week that the BSP would further cut rates if unfavorable developments in the global economy would pose more dampening effects on the Philippines’ own growth.