THE peso on Tuesday gained against the US dollar by five centavos on central bank intervention.

Traders took the cue by unloading long dollar positions, currency traders said.

The local currency closed higher at P44.55 from P44.60 Monday. A total of $605.5 million changed hands. A total of $823.7 million were traded on Monday.

A currency trader from a commercial bank said the market also underwent a correction after the P44.50 resistance level was breached.

“It was a healthy correction. Since that was a critical resistance [level], the market loaded dollars again after it was broken,” the trader said.

Security Bank treasurer Rafael S. Algara Jr. said the main indicator of the trade right now is still the fear of high inflation and rising oil prices since the market is not expecting a rate hike by the US Federal Reserve.

“We don’t think there will be a rate hike [by the Fed]. The biggest concern is still inflation,” he said.

Corporate demand is expected to prop up the US currency this week.

WHILE the International Monetary Fund (IMF) supports Manila’s decision to forgo a balanced budget this year, an IMF mission sent to the Philippines has expressed concern the country’s latest tax reforms may endanger the government’s fiscal targets for 2009.

PNB, Allied Bank stockholders approve merger

SHAREHOLDERS of Philippine National Bank (PNB) and Allied Banking Corp. yesterday approved the banks’ merger, a corporate exercise that may cost as much as P1.3 billion.

WB waits for RP move to tap financing facility

THE World Bank said it is waiting for the Philippine proposal to tap into the bank’s rapid financing facility to address the immediate needs of the people amid rising food and oil prices.

DOMESTIC interest rates can only go higher, experts said on Tuesday.

At the annual shareholders’ meeting of Philippine National Bank (PNB), officials said short-term interest rates are to move up “over the next 12 months.”

THE peso on Tuesday gained against the US dollar by five centavos on central bank intervention.

Traders took the cue by unloading long dollar positions, currency traders said.