Philippine Peso Snaps Six-Day Drop on Dollar-Sales Speculation
The peso rose, snapping a six-day decline, on speculation exporters and overseas workers sold dollars after the Philippine currency reached the weakest level in almost five months. Two-year government bonds rallied.
The peso touched 41.315 per dollar on April 8, the lowest level since Nov. 16. Financial markets were shut for a holiday yesterday. Bangko Sentral ng Pilipinas is watching market developments, including Japan’s stimulus measures, and their impact on the local economy will be considered at its April 25 policy meeting, Governor Amando Tetangco said this week.
“The exchange rate near a five-month low becomes attractive for the likes of overseas workers, especially those that are starting to pay the fees for the June start of classes,” said Roland Avante, president of Philippine Business Bank in Manila.
The peso gained 0.5 percent to 41.055 per dollar at the close in Manila, according to Tullett Prebon Plc. The currency advanced 4.4 percent in the past year, the second-biggest rally in Asia after the Thai baht. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, fell four basis points to 4.90 percent.
Exports fell 15.6 percent in February from a year earlier, the biggest decline in 14 months, official data showed today.
Bangko Sentral will keep open the option of cutting the interest rate it pays on its special-deposit accounts rate this month, Tetangco said on April 2. The central bank reduced the rate on the accounts by about half a percentage point each in January and March.
The yield on 12.375 percent bonds due February 2015 fell 11 basis points, or 0.11 percentage point, to 2.54 percent, according to midday fixing prices at Philippine Dealing & Exchange Corp.
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