![]() ![]() The currency was pegged against the US dollar until 1993, when the New Central Bank Act of 1993 set the peso on route to becoming a free-floating currency.Ī free-floating exchange rate means that the value of the PHP is determined by the interbank foreign exchange markets, in other words, by supply and demand. The Philippine peso (PHP), is the national currency of the Republic of the Philippines. Here we look at the latest moves in the Philippine peso, Southeast Asia’s world performing currency this year, what fuelled those moves and analysts’ US dollar to Philippine peso forecasts. Year-to-date the PHP has dropped -0.58% aganist the USD. The USDPHP CCS is traded in Bloomberg’s FIQ.The Philippine peso has rose two a two-month high in September 2022 Photo: An147yus / ShutterstockĪfter rising to an all-time high against the US dollar (USD) in September 2022, the Philippine peso ( PHP) has fallen slightly in 2023. The USDPHP CCS market is also supported by Bloomberg, a globally recognized trading platform provider for various financial products. Voice-broker participants in this market include Amstel, GFI, Tradition and Tullet Prebon. Banks that have signed up as regular participants include China Bank, RCBC, Robinsons Bank, Union Bank, ANZ, Mizuho and MUFG. Market makers in the dollar-peso cross-currency swap market include BDO, BPI, Metrobank, PNB, Security Bank, Citibank, DB, HSBC, ING Bank, JP Morgan and Standard Chartered Bank. It also has the support of the Money Market Association of the Philippines and ACI Philippines. The BAP Open Market Committee ensures that the USDPHP CCS market is guided by the rules and regulations of the Bangko Sentral ng Pilipinas, as well as the adoption of the ISDA Master Agreement and Foreign Exchange Global Code. “This will be beneficial for an import-dependent country like the Philippines in allowing businesses to lock in costs of imported commodities resulting in lower costs of goods and in effect, more price stability,” he said. Moreover, Yu said this also puts the Philippines at par with first-world countries in terms of having available financial options to manage risks and reduce costs. “Businesses with lock-in contracts can be assured of consistent profitability which allows businesses to flourish and be job generators,” Yu added. This is a big help in alleviating poverty and reducing business losses if they have lock-in contracts,” said Yu in an interview Tuesday, June 27, 2023. “In periods of escalating costs or inflationary environment, this serves as a great tool to lengthen price stability and induce order in the commodities market. Sought for comment, entrepreneur Steven Yu, past president of the Mandaue Chamber of Commerce and Industry, said the cross-currency swap will allow businesses to lock in foreign exchange or interest rates, in effect hedging or locking in costs of commodities or goods over a period. This will use the US dollar Secured Overnight Financing Rate as the floating rate benchmark for the US dollar leg. The USDPHP CCS market involves a Philippine peso fixed rate and a US dollar floating swap with standard tenors of one year, two years, three years, four years, five years, seven years and 10 years. ![]()
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