Home / Business / Peso rebounds after US signals possible stimulus expansion

Peso rebounds after US signals possible stimulus expansion


The peso rebounded Friday after the central bank launched a bond auction and the US government resumed talks on an expanded stimulus fund to mitigate the impact of the coronavirus disease 2019 (COVID-19) outbreak.

The pesot closed at P48.395 against the dollar Friday, against its P48.51 finish Thursday, according to Bankers Association of the Philippines data.

The peso opened at P48.46, its low for the day. The high was P48.375.

Dollar volume fell to $575.74 million from $710.9 million Thursday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso rose ahead of the release of the bond auction results Friday from the issuer, the Bangko Sentral ng Pilipinas (BSP).

The central bank said it would initially offer P20 billion worth of 28-day BSP bills as an additional tool for managing liquidity in the financial system.

The BSP said the auction volume was set at low levels to begin with, to be gradually increased based on market response.

Mr. Ricafort also said the peso was stronger following a statement from the White House on the US stimulus fund for COVID-19 relief.

“The peso was stronger versus the dollar after the White House signalled its openness to talks for a bigger stimulus fund with Congressional Democrats within 7-10 days. Talks have been delayed since August,” Mr. Ricafort said in a text message.

The White House said Wednesday that President Donald J. Trump is willing to accept up to $1.5 trillion in stimulus as outlined in a bipartisan plan issued by 50 House members.

This is higher than the proposal from Republican senators of $1 trillion and less than that of Speaker Nancy Pelosi of $2.2 trillion.

Federal Reserve Chairman Jerome Powell earlier warned the US economy will further slow down if approval of the stimulus drags on.

It expects US GDP to decline 3.7%. For next year, it is looking at a 4% drop.

For Monday, Mr. Ricafort expects the peso to trade between P48.30 and P48.60. — Kathryn Kristina T. Jose

Credit belongs to : https://www.bworldonline.com/


BDO Leasing sees 2020 net income climb by 439% amid restructuring

BDO LEASING and Finance, Inc. (BDOLF) registered a higher net profit last year despite booking …