The Philippine peso’s exchange rate fell lower against the US dollar today and bonds rose before the Philippine Central Bank cut interest rates for a second time this year.
Bangko Sentral ng Pilipinas lowered the rate on overnight deposits by 25 basis points to 4 percent, a move predicted by 14 of 18 economists in a Bloomberg survey. The decision was announced after the close of local trading.
“A 25-basis point cut is widely expected by the market,” Radhika Rao, an economist at Forecast Pte in Singapore, said before the rate review. “That is negative for the currency.”
The Philippine peso fell 0.2 percent to 42.820 per US dollar at the close in Manila, according to Tullett Prebon Plc.
Inflows into the stock market will support the peso, Rao predicted. Global funds boosted ownership of local shares by $518 million this year, exchange data show, contributing to the currency’s 2.4 percent gain.
The yield on the government’s 6.375 percent bonds due January 2022 dropped five basis points, or 0.05 percentage point, to 5.17 percent, according to noon fixing prices from the Philippine Dealing & Exchange Corp.