Thursday, January 24, 2013

Peso slightly falls as BSP keeps key policy rates

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MANILA, Philippines—The peso fell slightly on Thursday amid market’s expectation that the Bangko Sentral ng Pilipinas would keep its key policy rates at record lows.


The local currency closed at 40.63 against the US dollar, down by 1.5 centavos from the previous day’s finish of 40.615:$1.


Intraday high hit 40.615:$1, while intraday low settled at 40.66:$1.


Volume of trade amounted to $772.2 million from $605.7 million previously.


BSP officials earlier shrugged off concerns that the Philippines may be facing risks of asset price bubbles and overheating. The BSP said investments have been rising, and so the growing demand for goods and services might be sufficiently met by supply.


Given this backdrop, officials earlier said key policy rates were still appropriate.


Keeping such a view, the BSP indeed decided to keep its key policy rates steady on Thursday during the meeting of its Monetary Board.


With the decision, the key policy rates, which affect commercial interest rates, still stand at 3.5 percent for overnight borrowing and 5.5 percent for overnight lending. With the move, yields on peso-denominated financial instruments are expected to remain relatively the same as well.


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Tags: Bangko Sentral ng Pilipinas , business and finance , currencies , economy , Foreign Exchange , Interest Rates , key policy rates , Philippine peso , Philippines , US dollar



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