Peso appreciates on second day
THE VALUE of the peso appreciated for the second straight trading day on Friday on the back of improving investor confidence, analysts said.
The currency gained 12.5 centavos to settle at P42.80 per dollar from its P42.925-per-dollar close on Thursday.
The peso firmed up by 29 centavos on Thursday against a closing rate of P43.215 per dollar the previous day.
"The peso gained against the dollar for the second straight day on the back of the positive news on the country’s fiscal performance and [Finance] Secretary Cesar [V.] Purisima’s statement on the possible rating upgrade of the country’s debt rating," a trader said in a phone interview.
The government incurred an P18.131-billion shortfall in March, bringing the deficit for the first quarter to P26.197 billion, well below the P111.986 billion ceiling. It was also lower than the P134.179 billion shortfall booked in the same period last year.
After meeting with representatives of Moody’s Investors Service in Washington, D. C. and Fitch Ratings and Standard & Poor’s Ratings Services in New York City two weeks ago, Mr. Purisima said, "I believe we have a very good case. I am confident that they will give us the benefit of the doubt."
Such news of a ratings upgrade, the trader noted, has a positive effect on investors who may be enticed to invest in Philippine assets.
Fitch has a BB credit rating -- two notches below investment grade -- on the Philippines’ long-term foreign currency debt; S&P last November raised the credit rating a notch to BB with a stable outlook; while Moody’s rating is Ba3, three notches below investment grade, but it raised its outlook to positive from stable in January.
In a separate phone interview, another trader said the peso’s value was buoyed by remittance.
Currency dealers expect the peso to trade within the band of P42.50 to P43 per dollar next week.
The value of dollars traded on Friday reached $1.089 billion, lower than $1.346 billion traded the previous day. -- A. R. R. Gregorio
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CARLOS ANI - SEEDFINANCE Corporation - http://www.seedfinance.net
Email: carlosani@seedfinance.net
Landline: +63495010127 Cellphone: +639152919580
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