Peso firms after Fitch maintains PHL sovereign rating
THE peso strengthened slightly against the dollar on Friday, as market participants reacted to a recent decision by Fitch Ratings to maintain its credit rating for the Philippines.
The peso closed the week at P52.16 against the dollar, three centavos stronger than P52.19 finish Thursday.
The peso opened the session weaker at P52.228. The low was P52.29 intraday before closing the session at its best showing for the day.
Volume rose to $988.32 million on Friday from $892.15 million the previous day.
“The peso strengthened as local participants cheered after Fitch Ratings maintained the Philippine sovereign credit rating at ‘BBB’ and maintained a stable outlook,” a trader said in an e-mail Friday.
Fitch Ratings cited the continued strong performance of the economy and subdued overheating risk.
The investment-grade rating is a reflection of Fitch’s view of the government’s ability to pay its debts, and has the effect of helping reduce borrowing costs.
Earlier, S&P Global Ratings upgraded the country’s credit rating to “BBB+,” a notch away from its single “A” grade.
Meanwhile, another trader said that while onshore trading pressured the peso, the offshore market sold off the dollar after US gross domestic product (GDP) data came in stronger than expected.
The US economy grew 3.1% in the first quarter, exceeding market expectations and dampening fears of a looming recession.
“During the afternoon session, we saw quiet trading initially but the peso went to P52.16 at the close on the back of remittance pile-up during the weekend,” the second trader added. — Karl Angelo N. Vidal
