PHP at 3-month low vs. USD, PSEi slips further

MANILA- - Philippine peso finished Thursday little changed against the greenback but on its three-month low while the main stocks index slid for the third straight day on expectations for sustained normalization of US interest rates.

The local currency finished the day at 50.345 from 50.290 Wednesday, which a trader attributed to wait-and-see stance ahead of the Bangko Sentral ng Pilipinas' (BSP) announcement on the rate decision of its policy-making Monetary Board (MB).

MB kept the BSP's key rates at three percent for the overnight borrowing or reverse repurchase (RRP) rate, 3.5 percent for the overnight lending or repurchase (RP) rate, and 2.5 percent for the special deposit account (SDA) facility.

These have been maintained since June 2016.

The Board also maintained the 20 percent reserve requirement ratio for universal and commercial banks (U/KBs).

The trader said the Board's decision was widely expected but investors decided to stay at the sidelines to see the BSP's stand on the recent statements of Federal Reserve officials, who mostly hinted for additional hikes for the year.

The Federal Reserve has increased rates by a total of 75 basis points to between one and 1.25 percent, 75 basis points higher after three 25 basis points increase each last December, March and this June.

Foreign selling in the stocks market also weakened the peso, the trader said.

With these factors, the peso opened the day at 50.22 from 50.17 in the previous session.

It traded between its opening level and 50.37, resulting in an average of 50.327.

Volume of trade reached USD802.4 million, higher than the previous session's USD727.25 million.

The peso is seen to trade between 50.10 and 50.30 against the US currency Friday.

The Philippine Stock Exchange index (PSEi) shed 0.36 percent, or 28.03 points, to 7,858.34 points, which a trader pointed to foreign selling pressures ahead of the BSP rates announcement.

All Shares tracked the main index after it fell 0.20 percent, or 9.27 points, to 4,699.52 points.

Only the Financials gained among the sectors after it rose 0.32 percent.

Property registered the highest decline at 0.82 percent followed by Industrial, 0.61 percent; Services, 0.44 percent; Mining and Oil, 0.27 percent; and Holding Firms, 0.12 percent.

Volume reached 2.9 billion shares amounting to Php8.7 billion.

Losers led gainers at 102 to 98 while 47 shares were unchanged.

Source: Philippines News Agency