/PNA
MANILA — The Philippine peso closed sideways against the greenback on Monday as investors express hope for a cut in the Bangko Sentral ng Pilipinas’ (BSP) key rates but the Philippine Stock Exchange index (PSEi) ended in the red due to discouraging developments abroad.
The local currency ended the day at 52.2 from 52.25 Friday last week.
“The peso slid on speculation on the direction of monetary policy after the Bankgo Sentral ng Pilipinas (BSP) welcomed a pro-growth Governor who indicated he was open to cutting policy rates as inflation decelerates,” ING Bank Manila senior economist Nicholas Mapa said in a report Monday.
Earlier, BSP Governor Benjamin Diokno said the continued slowdown of domestic inflation, which slid to 3.8 percent last February from the previous month’s 4.4 percent, provides a venue for a cut in the central bank’s key policy rates after the 175 basis points increase in 2018.
He, however, clarified that any adjustment in the policy rates will be data dependent.
Mapa expects the policy-making Monetary Board (MB) to slash policy rates in May and in the last quarter of this year “given decelerating inflation and a possible slowdown in growth.”
“With inflation likely to be within target for 3 months by May 9 and the deceleration trend intact, it would be wise to see the BSP give the economy a much-needed break given that the inflation objective appears well-within reach,” he said but declined to give possible rate of the cut.
With possible cut in the BSP’s key rates this year following Diokno’s latest statements, the peso opened slightly better at 52.25 from 52.3 in the previous session.
It traded between 52.28 and 52.17, resulting to an average of 52.204.
Volume reached USD833.54 million, lower than the USD1.23 billion at the end of last week.
On the other hand, concerns on economic developments overseas resulted to a 1.13 percent, or 88.39 points drop, to 7,708.72 points.
The other counters tracked the main gauge, with the All Shares down by 0.77 percent, or 37.04 points, to 4,780.18 points.
Mining and Oil declined by 1.67 points and was followed by the Industrial, 1.52 percent; Holding Firms, 1.51 percent; Financials, 1.44 percent; Services, 0.32 percent, and Property, 0.08 percent.
Volume reached 692.47 million shares amounting to PHP5.5 billion.
Losers led gainers at 128 to 63 while 47 shares were unchanged.
