Wednesday, May 16, 2007 Peaceful elections strengthen peso v. dollar By Gil Alfredo B. Severino
PESO to US Dollar exchange rate Wednesday is an all time low of P46.80, Bacolod Banking System average guiding rate.
Regular influx of dollar remittances, low interest rates for dollar deposits and dollar holders' speculative shut-off are among the confluence of events leading to the virtual strengthening of the peso to the US dollar.
This was the statement issued by the Bangko Sentral ng Pilipinas (BSP-Bacolod) Bacolod on what appeared to be an all time low of the peso exchange rate to the US dollars.
In a phone interview with Sun.Star Tuesday, Melito Salazar, President of the Philippine Chamber of Commerce Foundation, Inc. and a retired Bangko Sentral Board Member said the generally peaceful election can be a factor but this can only be in the short run.
"Dollar investors' confidence within Philippine territories is something that is built-up and not a one-shot deal for two election days," Salazar said.
"A peaceful election, however, properly managed, is a prelude to a stable business environment. Killings involved those with certain political problems. No news about a businessman killed, thus the stabilizing effect is conducive to confidence," he added.
Meanwhile, BSP-Bacolod in a statement, noted the regularity of OFW remittances.
"Because of the low interest rate regime, families of OFWs are discouraged from depositing them through the banking system. Some had become sophisticated players and joined the speculative money market," the BSP statement reads.
Beginning this year until today, the statement added, speculations are converted into consumption owing to low peso exchange rates thus slowly increasing the market dollar supply.
