By: L.W.T. Noble with Reuters, BusinessWorld
Published: June 29, 2020 | 12:02 am
Full Article: Peso to rise on rate cut
Snippets: THE PESO is seen to continue appreciating against the greenback as the surprise rate cut last week is expected to support market sentiment.
The local unit ended trading at P49.92 versus the dollar on Friday, stronger by eight centavos from its P50.00 finish on Thursday, data from the Bankers Association of the Philippines showed. The peso also appreciated by 14 centavos from its P50.06 close on June 19.
Analysts said the surprise rate cut by the Bangko Sentral ng Pilipinas (BSP) on Thursday is positive for the peso.
“[T]he impact has spilled over to the peso last Friday, fueling the currency’s strength,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a text message.
In a surprise move, the Monetary Board slashed rates by another 50 basis points (bps) on Thursday. With this, rates on the BSP’s reverse repurchase, lending and deposit facilities were reduced to record lows of 2.25%, 2.75, and 1.75% effective Friday, June 26.
The BSP has slashed rates by 175 bps this year in a bid to cushion the impact of the coronavirus pandemic on the economy.
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