What's with 49

As of last monday, the Peso has breached the 49:1 dollar barrier. What's so important with it anyway?

1) For one, it will mean our Peso can buy more US greenbacks!

2) Once this psychological barrier (as what everyone calls it) is broken, we can expect the Peso to freely strengthen further.

3) Interest rates will drop. Now that more people want the Peso, the Bangko Sentral has more leeway wtih its monetary policies. They can lower interest rates on Peso accounts- and loans.

4) Lower interest means everyone can borrow cheaply. More money to spend, more businesses earn, more jobs created, better economy.

Advice:

1) Buy Peso time deposits now while interest rates are around 5%. If you wait further, OFW dollar remittances will start coming in. Peso will strengthen again and interest rates will go down further.

2) For dollar hoarders out there, I say still hold on to your dollars. Historically since 1988, the Peso has depreciated on average at around 6% a year. If you have dollar accounts right now, don't sweat. You still have not lost your money. You just lost your interest as the dollar depreciated but your principal is still intact. Since February, the Peso has only appreicated 4%- no worries then.


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Practice makes perfect.