• Peso slides to P44.08 to $1, weakest in 7 weeks

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    THE peso hit its weakest level in seven weeks against the US dollar at P44.08 to $1 on Thursday as investors took note of the upbeat outlook on US economic data.

    The easing of the local currency can be attributed to the stronger dollar, a private bank analyst said.

    Jonathan Ravelas, chief market strategist of Banco De Oro, said sellers of the peso took positions in the greenback on optimism about US economic growth.

    Initial data from the US government earlier showed the economy expanding by 4 percent in the second quarter of 2014.

    “I don’t see any domestic factor affecting the peso.  I think it is more external rather than domestic. It is really just the strong dollar,” Ravelas said.

    The peso closed at P44.08 on Thursday, shedding 37 centavos from the P43.71 close in the previous day’s trade. Thursday’s level was the weakest the peso has traded since June 18, when it closed at P44.12.

    Total volume transacted at the Philippine Dealing System amounted to $1.331 billion, higher than the $833.7 million changing hands on Wednesday.

    The analyst said the peso level on Thursday offset the gains in previous days which were traced from the central bank’s hike of its key policy rates last week.

    The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) last week raised its benchmark interest rates by 25 basis points each.

    The new rate for overnight borrowing, or reverse repurchase facility, now stands at 3.75 percent, up from 3.5 percent. That for overnight lending, or repurchase facility, is now at 5.75 percent, up from 5.5 percent previously. The BSP had kept the rates steady since October 2012.

    The rate on special deposit accounts was left unchanged at 2.25 percent, while the reserve requirement ratio for banks also remained unchanged at 20 percent.

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