Peso depreciation is `temporary aberration ` ....
Balita News
managers
MANILA, July 10 (PNA) - The Estrada administration said Saturday
the slight rise of the peso by the end of the trading week is merely a
``temporary aberration`` that is expected to normalize, with the local
currency strengthening further in the coming days because of additional
infusion of more dollars into the country.
President Joseph Estrada noted that the foreign exchange reserve is
at an all-time high of $14 billion, which would make it easier for the
Central Bank to ease any pressure on the peso instigated by currency
speculators.
``When we assumed office last year, the dollar reserves of the
Central Bank were only $5 billion, now its $14 billion. That`s why they
should not play this game because the government now has the ammunition
against them,`` he said on his program JEEP ni Erap: Ang Pasada ng
Pangulo.
Director General Felipe Medalla of the National Economic and
Development Authority said the slight depreciation of the peso may be
attributed to speculators against ``testing`` the government`s will,
noting that when the peso suffered a sharp fall last year, the country`s
foreign exchange reserves amounted to only $5-8 billion compared to a
record high $14 billion this year.
``This is what we call a temporary aberration. The peso stabilized
Friday at P38.50 to the dollar and we are sure this would even improve
because our economic indicators are fundamentally strong,`` Espiritu
said this morning on President Joseph Estrada`s radio program.
Medalla and Espiritu also reminded currency speculators that the
government expects millions of dollars to enter the country in the
coming days and weeks. These include the $100 million from the Asian
development Bank, another $100 million from Japan under the fund
initiative of Japanese Finance Minister Kiichi Miyazawa, $250 million
Pilipinas Shell in the Philippines.
Espiritu also said additional dollars are expected from the
increased remittances of overseas Filipino workers as well as the
continuing growth of the export sector.
``Our bankers should understand that many more dollars will enter
the Philippines.So how can our foreign exchange rate experience any
pressure?,`` he said.
Medalla said the government can easily unload, say, $200 million in
the market to wipe out speculators, who have begun feeling the crunch
last Friday.
``That`s why I think they are testing us, they`re trying to see if
will give in,`` Medalla added.
Espiritu called on these speculators to set aside their personal
interests at a time when the economy is still on its way to recovery.
Secretary Jose Pardo of the Department of Trade and Industry said
exporters have also found the P37-38 range of the peso against the
dollar as a ``comfortable`` bracket that would encourage their
businesses to prosper.
``We consult with the export sector regularly. The central bank
also monitors the movement of other Asian currencies but there is no
intervention. We just let market forces decide on the value of the
peso,``Pardo said.(PNA) rgc/OPS/ecp
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