Manila raises interest rate

Manila raises interest rate

MANILA (AP): The Philippine Central Bank announced yesterday
it will raise its key overnight borrowing rate to 15 percent from
13 percent in an effort to slow the peso's rapid depreciation.

The central bank also raised its overnight lending rate to 17
percent from 15 percent, also effective Tuesday.

The rise in overnight rates appeared to have an immediate
calming effect on the market, with many banks reducing their
offer rates for the dollar on the news. Higher interest rates
tend to make a currency more attractive to investors.

Central Bank Governor Gabriel Singson said the decision to
rise the rates was taken in response to the peso's sharp
depreciation.

Singson noted that from a closing rate of 42.70 pesos to the
U.S. dollar on Thursday, the peso weakened to 43.49 pesos on
Friday and to 44.79 pesos in afternoon trading yesterday.