BSP to back banks in need of dollars

Following its decision to ease the rules on foreign exchange, the Bangko Sentral ng Pilipinas announced that it was ready to sell more dollars to banks to accommodate the expected rise in foreign currency demand from individuals and businesses in the country.

According to BSP assistant governor Ma. Cyd Tuaño-Amador, banks have adequate dollar reserves in their vaults to answer the rise in demand for the greenback. But she quickly added that the BSP is prepared to sell more dollars to banks in case demand becomes even more significant.

“Banks have ample liquidity, but in case they need more dollars, the BSP would be ready to sell,” Amador said Friday. “The BSP is always ready to buy or sell currencies to maintain orderly market conditions.”

Data from the central bank showed that outstanding dollar deposits placed in banks stood at $25.15 billion as of the end of 2012. The amount was up by nearly 4 percent from the $24.20 billion registered in the same period of the previous year.

Also, the BSP is managing the country’s foreign exchange reserves now worth about $84 billion.

Amador said that, with the dollars on hand, banks have the resources to meet the requirements of the public, such as resident and visiting foreigners, importers and businesses that seek to invest abroad.

The move to further liberalize the rules on foreign exchange is meant to increase demand for dollars and make it easier for people to bring the foreign currency out of the country.

The move will also help temper the rise of the peso, which last year became one of the fastest appreciating currencies against the US dollar.