Aug. 2 (Bloomberg) -- The Philippine peso fell for a second day after the Federal Reserve refrained from taking steps to spur U.S. growth, increasing concern the global economy will weaken.
The Federal Open Market Committee said yesterday it will provide additional policy accommodation as needed, without signaling imminent plans for another round of asset purchases. Philippine bonds gained after the central bank said yesterday that the nation’s inflation outlook gives more room for policy action, if needed. Bangko Sentral ng Pilipinas cut its benchmark rate last week to a record low of 3.75 percent from 4 percent.
“The result of the Fed meeting is definitely negative for emerging-market currencies,” said Rafael Algarra, executive vice president of financial markets at Security Bank Corp. in Manila. “No monetary loosening means there is a risk of a further slowdown in growth. It’s not positive for risk appetite.”
The peso weakened 0.2 percent to 41.853 per dollar at the close in Manila, prices from Tullett Prebon Plc show. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 6 percent.
The yield on the Philippine government’s 5.875 percent bonds due January 2018 fell eight basis points to 4.60 percent, according to Tradition Financial Services.
“The global outlook is likely to continue to remain weak,” Governor Amando Tetangco said today. “Our next move will be data-dependent, including any shifts in capital flows and their impact on financial market prices.”
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