Peso strengthens on as Moody’s keeps country’s credit rating

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THE PESO rallied against the greenback on Friday as Moody’s Investors Service affirmed the country’s credit rating.
The local unit closed at P49.44 per dollar on Friday, stronger by 9.5 centavos from the P49.535 finish on Thursday, data from the Bankers Association of the Philippines showed.

Week-on-week, it also appreciated by 4.5 centavos from the P49.485 close on July 10.

The peso opened the session at P49.55 versus the dollar. Its weakest was at P49.57 while its intraday best was at P49.41 against the greenback.

Dollars traded declined to $687.8 million on Friday from the $768.49 billion logged on Thursday.

The latest affirmation of the country’s credit rating supported the peso, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“The peso exchange rate closed stronger after the latest affirmation on the Philippine credit ratings by Moody’s, another sign of resilience on the country’s economic and credit fundamentals as some countries were downgraded due to the COVID-19 (coronavirus disease 2019) pandemic,” Mr. Ricafort said in a text message.

Moody’s on Thursday kept the Philippines’ sovereign credit rating at Baa2, a notch above the minimum investment grade, saying the country’s strong fiscal position developed in recent years will protect it from the impact of the coronavirus crisis. The Baa2 rating was given in December 2014.

The credit rater also assigned a “stable” outlook to the rating, suggesting this will be maintained over the next six months to two years.

Meanwhile, a trader said the peso continued to strengthen “after the BSP reported a new record-high level of gross international reserves (GIR) from last month”.

Data released by the central bank on Wednesday showed GIR rose 9.88% to $93.318 billion as of June from its $84.931 billion level a year ago. This is also higher than the $93.288 billion seen as of May.

The June level is already beyond the $90-billion projection of the Bangko Sentral ng Pilipinas for the year. — L.W.T. Noble