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BSP ready to address wild forex swings

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The Bangko Sentral ng Pilipinas (BSP) stands ready to control spikes in the foreign exchange market that may lead to higher consumer prices, which may choke the country’s growing economy.

BSP Governor Amando Tetangco Jr. on Tuesday said the peso’s recent weakness, caused mainly by the pullout of foreign funds from emerging markets like the Philippines, has yet to become a source of concern for local economic managers.

“If it was moving out of line, then that may be a basis for the BSP to try and smooth the peso’s movements,” Tetangco said.

The peso fell to a more than two-and-a-half-year-low of 44.50 against the greenback on Tuesday amid lingering concerns over the tapering of the US Federal Reserve’s monthly asset purchases meant to keep interest rates low.

The local currency’s drop also came amid pending military intervention by the US in Syria following reports of the latter’s use of chemical weapons on its citizens.

So far this year, the peso’s average value was 41.50 against the dollar. This was well within the BSP’s assumed average of 41 to 43 against the greenback for the year.

For now, Tetangco said the BSP’s foreign exchange policy would remain the same. “We allow the peso to respond to market forces but with scope for BSP participation in the market to avoid excessive volatility in the exchange rate,” he said.

He said the BSP would consider more significant intervention in the foreign exchange market if the peso would continue to depreciate to the point of affecting consumer price movements.

Tetangco emphasized that there was enough liquidity in the local economy to avert any shortage of cash caused by capital flight that could slow down the country’s growth. The BSP also had ample reserves that could be used to ensure that there were enough dollars to pay for the country’s import needs.


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Tags: Amando Tetangco Jr. , Bangko Sentral ng Pilipinas , BSP , Foreign Exchange Market , US Federal Reserve

  • 33Sam

    OH YEAH??
    AND HOW MUCH OF THAT IS DUE TO GOLDMAN SACHS CITI CORP GARAPATA MAFIA SUCKING THE LIFE BLOOD OUT OF YOUR VAULTS???

    EVIL COMES AS DERIVATIVE BUNDLES, A WEAK-WILLED GOVERNMENT AND A WHORE MENTALITY TO GIVE UP ALL INTEGRITY FOR FAKE PROGRESS.

    THE BANKING CROOKS YOUR LEADERS ALLOWED TO LEECH ONTO YOUR GOVERNMENT, MOVE CAPITAL OUT OF THE COUNTRY SO EVEN IF YOU REPORT ECONOMIC UPSWINGS, IT IS USELES BECAUSE THE MONEY ISN’T SATYING PUT IN THE COUTRY. UITS BEING MOVED OUT.

    BRAZIL WAS WISE TO THIS AND TOLD THESE BANKSTER TO TAKE A HIKE EVEN IF THESE CROOKS THREATENED CUTTING OFF ACCESS OF BRAZI’S PRODUCTS TO ENTER THE U.S. MARKET!!!

    FILIPINOS ARE EASILY RAPED, BUT YOU CAN’T RAPE THE WILLING!!!

  • OFW_Investor

    The Phil economy has decoupled from the US a long time ago. The US Fed actions does not really affect the economy in any meaningful way except for a Foreign Fund sellers in the the market.(They have huge losses too at the disorderly rate they are selling). Purefoods will still sell a lot of Hotdogs and Chicken, SM Group will continue to benefit from remittances all over the world. AP wll sell and generate a lot electricity, Telcos will continue to pile up money. Dividends will still ba paid to patient Investors.
    A depreciating currency means more purchasing power form OFW families.
    Only those who have leveraged themselves to the hilt with debts are going to be affected.

  • Pork lover boy

    And pag kinulang? Uutang tayo sa IMF di ba? I know because I’m a senator.

  • carlcid

    As early as last April or May, the chatter was about the booming economy, the record-breaking stock market and the surging Peso. There was speculation of the Peso breaking into P37 or P38/ USD barrier. The President proudly proclaimed a strong Peso as the sign of investor confidence in his governance.

    However, as soon as the U.S. Fed announced plans to taper Quantitative Easing, emerging markets tanked and EM currencies took a dive. It turns out that the economic boom was only an illusion propped up by cheap money due to the excess liquidity from monetary easing. That is why high growth did not have economic traction. Why high growth did not translate into improvements in ordinary people’s lives. And now, the chickens are coming home to roost. In the meantime, how does the government walk back the hype that it created about its illusory economic miracle?

  • Roland_F

    This FX-rate fall by 10% was to be expected …. after Goldman Sucks tried to persuade naive investors in June that the Peso will climb by 10% (from 41 to 37 ).

    Also the bullish articles here from Metro and BPI investment “experts” that the stock market (PSEI index) will rise back to May-2013 records and further above 8000 .. maybe they just wanted to find naive takers of their selling spree.

    What will happen if the FED is really stopping the QE money printing press ?? PSEI below 5000 and FX-rate 1:50 ??

  • DGuardian

    Nakapagtataka na alalang-alala si BSP Governor Tetangco sa diumano ay pagtaas ng mga bilihin at iba pa dahil sa depreciation ng peso, ganoong kahit na bumagsak nang husto ang dollar sa 39 pesos bawat isang dolyar ay napakatataas pa rin ng mga bilihin at ang mga presyo ng mga bilihin ay parepareho ng halaga mag-depreciate man o mag-appreciate ang peso. Ang mga Filipino consumers ay nakatali na sa napakatataas na presyo ng mga bilihin anuman ang maging exchange rate. Huwag ninyo nang idahilan pa ang mga mamimilimg Pilipino sa plano ninyo na laging mataas ang peso kaysa dollar. Hindi kaya mayroong kasapakat ang mga magnanakaw na mga legislators at mga civilian na kasabuwat nila upang napakarami silang mabiling dollars mula sa pork barrels na kinulimbat nila at hindi rin kaya kaalam din ang Binondo black market at ang marami pang ibang moneychangers para mas maraming mabiling mga dollars ang mga pesos nila.? Ang kahabag-habag ay ang sambayanang Pilipino na ang majority ay ubod nang hihirap.

  • eight_log

    Now you can divest with the $$$$ you bought whiile the peso was strong unless you spent it somewhere else!!!! Hope your kitty had been replenished for more losses!!!!



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