Peso plunges below 54 to dlr, recovers after intervention

Asian Economic News, July 23, 2001

MANILA, July 18 Kyodo

The Philippine peso breached the 54 to the U.S. dollar level Wednesday, posting its lowest intraday rate of 54.335 to the dollar since President Gloria Macapagal-Arroyo took over as president in January.

But after trading between 53.700 to 54.335, the peso closed at 53.700 on what traders say was a heavy infusion of dollars into the market by the central bank. Some traders estimate the bank sold up to $80 million to pull the peso above 54.000.

The Bankers Association of the Philippines said volume of trades swelled to $168.50 million from a thin $48.50 million Tuesday.

Socioeconomic Planning Secretary Dante Canlas expressed optimism early Wednesday the peso-dollar exchange rate will soon stabilize.

The diminishing demand for imports and expected dollar income remittances from overseas Filipino workers would allow the peso to recover some lost ground, he added.

''I don't think it will reach the level of 55-60 pesos, which some fund managers are saying. I presume that it will play around 50 to 51 pesos toward the end of the year,'' Canlas told a breakfast forum.