by: Sarah Joson
Wednesday, April 8, 2015 |
With this year’s increase in interest rate by the US Federal Reserve, the Philippine peso is seen to lose traction. However, analysts expect that it will perform better compared to currencies in neighboring currencies.
During this year’s first quarter, the peso-dollar exchange rate fluctuated from P44.06:1$ to 45.065 and became steady at P44.58.
Guaya Yroen Melgar, research analyst at MetisEtrade Inc., said the peso has been stable while investors waited for Fed’s decision. She added that an increase in rate would help the circulation of money back to the US, and strengthen the demand for dollars. The Fed is firm with its decision to keep the rates until the next meeting, which will happen in June.
The organization began the program last October, and its $85-billion monthly bond purchases decreased in January 2014.
Bank of the Philippine Islands’ lead economist Emilio Neri Jr. said a 6.1 percent growth in the country’s gross domestic product (GDP) was seen last year, but depreciation is caused by the Fed rate hike.
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