/ BSP AT EASE W/ POLICY STANCE
[central bank governor Amando
Tetangco]
MANILA, JULY 8,
2011 (MALAYA) The peso yesterday closed at a
10-week high on market anticipation of another increase in the Bangko Sentral's
key rates after June inflation hit a 26-month high.
The currency closed at 42.89 to a dollar, 16 centavos higher than the other
day's close of 43.05.
This was peso's highest close since May 11, 2011, when it stood at 42.88
against the greenback.
On Tuesday, the government announced that inflation for June went up to 4.6
percent on higher costs of utilities, transport and clothing.
Although the figure was still within the forecast range of the BSP, central
bank governor Amando Tetangco stressed that pressures remain, prompting analysts
to think that another round of rate hike is possible when the Monetary Board
meets next on July 28.
But in an interview yesterday, Tetangco said the fundamental factors that
influence the exchange rate are still positive.
"The BOP remains in surplus so you have more dollars coming in than more
dollars going out. The prospects for continued economic growth are also still
positive so it's favorable to the peso," Tetangco said.
He added that the country had two credit rating upgrades in a period of one
week and three in a period of six months, adding positive news for the economy.
He stressed that their policy is not really to favor any exchange rate or any
exchange rate direction.
"Our policy is to smoothen the volatility in the movement. So if there is an
appreciation we allow that; if there is depreciation we also allow that. But we
have to make sure that there are no sharp movements that can be destabilizing,"
Tetangco said.
He said that right now the peso is in the middle of the range in terms of
both appreciation and volatility.
"We are basically moving together with the other currencies. In fact, if you
look at the real effective exchange rate, we are in the middle of the pack.
(Other currencies) have appreciated more than the peso," he said.
The peso yesterday hit a high of 42.89 and a low of 43.05.
Total volume of trade reached $1.102 billion, almost $400 million more than
Tuesday's total volume of $754.59 million.
BSP at ease with policy stance By Iris C. Gonzales
(The Philippine Star) Updated July 07, 2011 12:00 AMComments (0)
[Finance Secretary Cesar Purisima]
MANILA, Philippines - Despite the inflation rate reaching a 26-month high in
June, the policy-making Monetary Board of the Bangko Sentral ng Pilipinas (BSP)
remains comfortable with its policy stance.
"We're still comfortable," noted Finance Secretary Cesar Purisima, the
government representative to the policy-making Monetary Board of the BSP.
Purisima also believes that oil price have tapered off and that inflation is
easing.
However, he said that the position of the BSP may easily change, depending on
developments that could affect inflation and oil prices.
Consumer prices rose to a 26-month high in June, according to the latest
report from the National Statistics Office (NSO).
It said that inflation rate in June climbed to 5.2 percent, its fastest pace
since the 5.6 percent recorded uptick in April 2009.
Soaring oil prices have been blamed for inflation although prices have been
tapering off, allowing local oil firms to implement a 50-centavo price rollback
last weekend.
"Higher annual increments were recorded in alcoholic beverages and tobacco;
clothing and footwear; housing, water, electricity, gas and other fuels;
transport, recreation and culture; education; and restaurants and miscellaneous
goods and services index," the NSO said.
In the first half of the year, the country's inflation rate hit 4.7 percent
which is near the top range of the three percent to five percent target of the
BSP.
In May, inflation hit a revised five percent from the initially reported 4.7
percent.
Last June 16, the BSP kept interest rates unchanged but decided to raise the
reserve requirement on deposits and deposit substitute of banks and non-banks
with quasi-banking functions to siphon off at least P38 billion of excess
liquidity in the financial system and counter any additional pressures.
As such, the overnight borrowing rate remained at 4.5 percent and the
overnight lending rate at 6.5 percent.
The central bank adjusted interest rates by 25 basis points last March 24 and
by another 25 basis points last May 5 as a preemptive move to keep inflation
expectations well anchored amid the escalating price of oil in the world
market.
Chief News Editor: Sol Jose Vanzi
© Copyright, 2011 by PHILIPPINE HEADLINE NEWS ONLINE
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rights reserved
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