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Peso rises vs dollar on proposed stimulus

THE peso rose as investors were optimistic about a proposed stimulus package. — BW FILE PHOTO

THE PESO gained against the greenback on Wednesday, supported by hopes for the timely passage of key measures that could help the economy rebound from the coronavirus crisis.

The local unit finished trading at P48.038 per dollar yesterday, appreciating by 1.1 centavos from its previous close of P48.049, data from the Bankers Association of the Philippines showed.

The peso opened the session at P48.04 versus the dollar. Its weakest showing for the session was at P48.045 while its intraday best was its close of P48.038 against the greenback.

Dollars traded increased to $897.5 million on Wednesday from $357.6 million on Tuesday.

The peso gained ground versus the dollar on the back of legislative developments seen to help in the economy’s recovery from the recession caused by the pandemic, a trader said in an e-mail.

“The peso appreciated on hopes of the eventual passage of the CREATE (Corporate Recovery and Tax Incentives for Enterprises) bill and the prospects of a Bayanihan 3 bill from the Lower House,” the trader said.

The CREATE bill looks to bring down corporate income tax to 25% from 30% and streamline fiscal incentives. It is now awaiting President Rodrigo R. Duterte’s signature.

Meanwhile, House Speaker Lord Allan Jay Q. Velasco and Marikina Representative Stella Luz A. Quimbo filed House Bill No. 8628 or the Bayanihan to Arise As One Act which could provide another P420 billion to the country’s pandemic response. Among its key features are a P108-billion cash assistance for households and P100 billion to fund capacity building of critically affected businesses.

Another factor that boosted the peso’s strength was the local stock market’s gains, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

Local shares continued to climb on Wednesday as the rise in global coronavirus cases slowed and on expectations that the central bank will keep rates low at its meeting today (Feb. 11).

The benchmark Philippine Stock Exchange Index (PSEi) rose by 16.6 points or by 0.23% to 7,082.15, while the all shares index increased by 10.88 points or 0.25% to 4,260.81.

Bangko Sentral ng Pilipinas (BSP) Monetary Board member Felipe M. Medalla said in a briefing on Tuesday that increasing the country’s interest rate “is not in the picture.” He added that they are taking into account the impact of key rates on financial security as the country recovers from the pandemic.

The BSP will meet to review its policy settings on Thursday, Feb. 11.

For today, the trader gave a forecast range of P48 to P48.10 while Mr. Ricafort expects the local unit to play around a tighter band of P48.02 to P48.06 per dollar. — LWTN

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