Peso falls as BSP takes steps to fend off speculative investmentsBy Michelle V. Remo |Philippine Daily Inquirer
MANILA, Philippines—The peso fell on the first trading day of the week after the Bangko Sentral ng Pilipinas stressed it would not tolerate currency-appreciation pressures resulting from speculative portfolio investments.
The local currency closed at 40.70 against the US dollar, down by 12.5 centavos from Friday’s finish of 40.575:$1.
Intraday high hit 40.62:$1, while intraday low settled at 40.74:$1.
Volume of trade reached $579.5 million from $630.7 million previously.
The BSP has said it is prepared to implement more measures, if necessary, should it see signs of rising speculative activities involving the currency.
BSP Governor Amando Tetangco Jr. reiterated last week that the monetary authority would allow the peso to appreciate some more this year but only if this would be brought about mainly by structural flows, which include remittances and foreign direct investments.
He said the BSP would not accommodate peso appreciation if this would mostly come from currency speculation by yield-seeking fund owners.
Traders said pronouncements from the BSP would have an impact on investment decisions of investors, but they noted that the outlook on the Philippine economy for this year has remained positive and that this would help keep a healthy appetite for peso-denominated securities.