Sunday, April 22, 2007

PESO CLOSES AT NEW 6-YEAR HIGH

PESO CLOSES AT  NEW  6-YEAR HIGH

MANILA, APRIL 21, 2007 (STAR) By Des Ferriols - The peso stayed
yesterday at six-year highs against the dollar as monetary officials
said they are taking moves to mop up liquidity while keeping key interest
rates steady.

At yesterday’s trading at the Philippine Dealing System (PDS), the
peso traded between 47.510 and 47.650 against the dollar. By the end of the
day, the peso closed at its intra-day high of 47.51 to the dollar with
total turnover hitting $689.50 million.

Dealers said the strength of the peso was due in part to the steady
surge of remittances from overseas Filipino workers (OFWs).

On the other hand, the market was also mildly relieved that it could
at least glean some direction from the moves of the BSP when it decided to
mop up liquidity to curb possible inflationary pressures from the rapid
growth in domestic money supply.

As a result, the impact of market reaction on the peso was muted
since the BSP kept its policy settings unchanged.

For his part, BSP Deputy Governor Diwa Guinigundo said the central
bank did not expect the Monetary Board (MB)’s decisions to have a
prolonged impact on the foreign exchange rate.

"There will be some initial reaction but it really shouldn’t affect
the exchange rate so much," Guinigundo said.

Over the horizon, however, the currency market was also looking at
the coming elections which normally creates some uncertainty in the market.
Only this time, dealers said the campaign process appeared to be
proceeding in an orderly fashion.

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Even with these economic breakthroughs the country is still facing
uncertainty due to the fact that it will be having its mid term elections.
Even though this election will not affect the President, Vice-president, and half
of the senators, it will still have an impact on the power balance
between the administration and opposition. If the balance is upset and
be favored to the administration, vigilance within the private sector
must be done but at the same time vigilance on the opposing group,
these people will certainly and always be crying foul on the election
results. It would be true that many wants President Arroyo to finish her
term completely there are still many out there, I'm pointing at the
opposition who wants her to be booted out as early as possible.

The current president has done so much for the country, but I would
admit some of the decisions done were for face saving, not just for
herself, but also the whole administration. The media as always have
been fueling much of these very bad decisions and they should be ashamed
of themselves. Today, media in the Philippines is either pure liars
or pure opportunists.

When will filipino's learn from their mistakes...

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