Manila (Philippine Daily Inquirer/ANN) - The peso strengthened further to its highest level in about four years, ending yesterday's trading day in the 41-to-a-dollar territory.
Traders said the appreciation of the peso, which moved together with other key Asian currencies, came following reports the central banks of China and the European Union may implement measures to stimulate their respective economies.
Such a move would benefit emerging markets, including the Philippines, which have China and the eurozone as two of their biggest export markets.
The peso closed at 41.72 against the US dollar yesterday, up by 30 centavos from Monday¿s finish of 42.02:$1.
The latest close was the highest in about four years. The last time the peso closed stronger than 41.72:$1 was on April 3, 2008, when it finished at 41.64 against the greenback.
Intraday high hit 41.71:$1, while intraday low settled at 41.94:$1. Volume of trade amounted to $1.2 billion from $883.65 million previously.
The central banks of China and European Union were reported to be considering the implementation of stimulus measures to boost economic growth. Traders said the reports helped improve the outlook of fund owners on the global economy¿s performance for the short term.
Consequently, traders said, their appetite for emerging-market assets, such as peso-denominated stocks and bonds, improved.
Meanwhile, the Bangko Sentral ng Pilipinas (BSP or Central Bank of the Philippines) said the appreciation of the peso was not solely an influence of external factors but by the favourable economic indicators for the Philippines as well.
¿The Philippines is a recipient of flows of late due to the recent rise in investor risk appetite and underlying strength of our domestic growth prospects," BSP Governor Amando Tetangco Jr. told reporters.
The Philippine economy grew by 6.4 per cent in the first quarter from a year ago. This was the second-fastest growth rate in Asia during the period following China¿s 8.1 per cent.
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