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Thursday, March 13, 2003
Peso breaches 55 level; gov't after speculators
MANILA -- Government is checking the tax records of suspected currency speculators, among several measures put in place to relieve further pressure on the peso, which fell past the key 55 level to the US dollar Wednesday in a fresh 25-month low.
In early trading in Manila, the peso plunged to 55.05 to the dollar from 54.90 on Tuesday.
It closed at 55.099 to the dollar later Wednesday, within striking distance of its historic low of 55.25, as concerns over possible war in Iraq and the Korean crises added to prevailing domestic security worries, dealers said.
"There are ways of checking on speculators, including looking at their BIR (Bureau of Internal Revenue) records. So that is being done today," President Arroyo told a press conference Wednesday.
Central bank deputy governor Alberto Reyes threatened to expose the speculators.
Reyes said the central bank had found "less than five banks" with "problems with documentation" for their dollar purchases. He did not elaborate.
In previous episodes of speculative activity, the BSP tightened reporting requirements for dollar purchases and fined nine banks for buying dollars without proper documentation.
Keeping tabs
Arroyo said she is keeping tabs on the movement of the peso through Trade Secretary Manuel Roxas, her representative in the Monetary Board, but that the task of defending the currency falls mainly on the Bangko Sentral ng Pilipinas.
Her spokesman Ignacio Bunye said among the other measures available to the BSP include adjusting the reserve requirements of banks, regulating the interest rates, and moral suasion.
The currency dived to the all-time low on Jan. 18, 2001 at the height of a military-led popular uprising that installed President Arroyo after the ouster of corruption-tainted Joseph Estrada.
At the end of the trading session, the peso was found to have traded at a day low of 55.10, according to the Bankers Association of the Philippines.
"The market is getting more worried as even before a war breaks out in the Middle East, we're already seeing an increasing number of terror attacks here at home," a dealer said.
A blast at the airport of the southern city of Davao last week killed 21 people and injured more than 150 others. There has also been intense fighting between Muslim separatist rebels and government troops in the troubled south.
"The uncertainties in the Middle East will definitely bring more volatility to the currency market in the coming days," the dealer said.
War jitters
Bangko Sentral ng Pilipinas Deputy Gov. Amando Tetangco said the peso weakness was temporary and due to war jitters over Iraq.
Other dealers said they saw the central bank supporting the peso at 54.98 but that it could not prevent the currency from breaching the sensitive 55 level.
"With dollar-buying by corporates, including oil companies, continuing amid the threats of war in Iraq and more violence in our own country, we are still looking at a further weakening of the peso," a dealer with a foreign bank said.
News that a March 17 deadline for Iraq to disarm may be extended did not help ease war jitters, dealers said.
"A lot of companies are still hedging their future dollar requirements."
Dealers added the currency market feared more terror attacks could be launched after last week's deadly bombing at Davao International Airport, which the military blamed on the separatist Moro Islamic Liberation Front. Sunnex Luzon/With AFP |
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