Philippine peso's rapid rise a concern
Thursday, September 13, 2007
THE Philippines' central bank cautioned yesterday that a rapid rise in the peso remained a concern.
The currency jumped 0.7 per cent to 46.8 against the US dollar after muted local reaction to former president Joseph Estrada's sentencing to life imprisonment for plunder.
Uncertainty over the verdict and the potential for violence among Estrada's supporters had cut one per cent off the currency's value earlier in the week and pushed it back to the 47 level against the US dollar.
"What concerns us...is any rapidity in the peso's up moves, which could be disruptive to business planning. We are also mindful of the adverse impact of a strong peso on specific segments of the economy," the central bank said in a statement handed out on disc at a briefing in Manila.
The central bank also said it expected the peso to be supported by a rising balance of payments (BOP) surplus. It had previously said it expected the BOP surplus to hit a record US$6.3 billion this year due to record remittances from overseas workers.
The central bank also noted the challenge of a potential global credit crunch due to losses in the US sub-prime mortgage sector.
"It's possible that some segments of the investment universe may experience a drying up of liquidity," the central bank said. The currency is still up 4.76 per cent against the US dollar so far this year, the third best-performing currency in Asia.Reuters
The currency jumped 0.7 per cent to 46.8 against the US dollar after muted local reaction to former president Joseph Estrada's sentencing to life imprisonment for plunder.
Uncertainty over the verdict and the potential for violence among Estrada's supporters had cut one per cent off the currency's value earlier in the week and pushed it back to the 47 level against the US dollar.
"What concerns us...is any rapidity in the peso's up moves, which could be disruptive to business planning. We are also mindful of the adverse impact of a strong peso on specific segments of the economy," the central bank said in a statement handed out on disc at a briefing in Manila.
The central bank also said it expected the peso to be supported by a rising balance of payments (BOP) surplus. It had previously said it expected the BOP surplus to hit a record US$6.3 billion this year due to record remittances from overseas workers.
The central bank also noted the challenge of a potential global credit crunch due to losses in the US sub-prime mortgage sector.
"It's possible that some segments of the investment universe may experience a drying up of liquidity," the central bank said. The currency is still up 4.76 per cent against the US dollar so far this year, the third best-performing currency in Asia.Reuters
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