|
By Maricel E. Burgonio Reporter
The peso closed to its new nearly eight-year high, mainly driven by
weak US dollar and lack of no corporate demand, traders said.
At the Philippine Dealing System,
the peso closed P40.56 to $1 on Wednesday, a slight appreciation
compared with P40.75 on Tuesday.
It opened P40.70 and dipped to a
low of P40.77, and a high of P40.55. Total volume turnover reached
$872 million, driven by offshore flows of peso, which is priced on
strong peso.
“What we’re seeing is too
fast appreciation. It’s market driven,” Jonathan Ravelas, Banco
de Oro (BDO) trader, said.
Ravelas said there’s more room
for peso to further appreciate but will unlikely reach the P39 level
yet.
The market’s expectation on
further US fed rate cut contributed to the weakening of the US
dollar.
He said the Bangko Sentral ng
Pilipinas did not intervene in the market yesterday, leading to the
fast appreciation of the peso.
Marcelo Ayes, Rizal Commercial
Banking Corp. (RCBC) vice-president, said the peso is also driven by
offshore flows of nondeliverable forward peso besides weak US dollar
and weak corporate demand.
Nondeliverable forwards are
contracts used in the foreign-exchange market so dollar holders are
assured of a fixed rate in a future period, minimizing the risk of
price volatility in the exchange system.
Ayes said exporters should
improve its export market, such as tapping the euro or any other
currency to lessen impact of the strong peso.
Lower power costs can offset the
impact of strong peso on exporters, Ernesto Santiago, Semiconductor
and Electronics Industries in the Philippines (SEIPI) executive
director, told The Manila Times.
High oil prices triggers the
increase of power cost, which has 15 percent share in the business
cost of the semiconductor and electronic exporters.
“Increasing cost of fuel has
driven the cost to generate power, which comprises 73 percent of the
electricity bill,” Santiago said.
Electronics and semiconductor
products comprise 50 percent of the total exports.
The exports sector contributes 35
percent of the country’s economic growth. It grew 4.7 percent as
of November 2007, reaching $26.06 billion.
Bangko Sentral earlier said the
strong peso tempers inflationary pressure brought by high oil
prices.
Average increase of consumer
prices reached 2.8 percent last year, even lower than the
government’s target of 4 percent to 5 percent.
|
