BSP Revises Discount Rates of 9 Currencies

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MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is revising the discount rates applied to the buying rate of nine out of 17 foreign currencies including the British Pound and Swiss Francs in its reference exchange rate list to remain consistent with market rates.BSP's treasury department has submitted to the Monetary Board the review and the proposed adjustments to the discount rates for 2011.Based on the memo, the treasury department has proposed a reduction in the discount rate for the British Pound from 0.985 to 0.980 while the discount factor for the Swiss Francs will also decrease to 0.980 from 0.985.The BSP will tweak the discount rates for the two currencies to get to the lowest discount factor quoted in the past five years. But in the case of the Swiss Francs, the adjustment is because of the increased volatility in the Swiss currency.The BSP, in the meantime, will increase the discount rate of the Canadian Dollar by 0.010 and 0.005 for the Brunei Dollar, Saudi Arabian Rial, Bahrain Dinar, United Arab Emirates Dirham, Korean Won, and the Chinese Yuan.The memo explained that the increase will gradually align the discount factors to market rates. At the moment, officials noted that the discount rate for the buying rate of the currencies are lower by as much as 0.033 from the lowest discount factors quoted in the last five years for all currencies.The BSP is maintaining the discount factor for the US Dollar, the Japanese Yen, the Hong Kong Dollar, the Singapore Dollar, Australian Dollar, Euro, Thailand Baht, and the Indonesian Rupiah for this year. …