Peso strengthens to 55.350 to the U.S. dollar

The Philippine peso closed stronger on Tuesday at 55.350 to the U.S. dollar, rising from two-month lows on suspected intervention by the Bangko Sentral ng Pilipinas (BSP), although authorities denied intervening.

The peso rose to 55.37 per dollar before the midday trading break, recovering from a 55.59 August trough that took it within striking distance of a January 2001 record low of 55.75. It averaged at 55.463 on a hefty volume of $213.50 million.

The head of trading at a Manila-based bank said the Philippine central bank had sold dollars to prop the peso.

"Plus last week's dollar demand is not there and the exporters are cashing in on the peso weakness," he said.

BSP Governor Rafael Buenaventura told reporters the BSP had not intervened in the market on Tuesday.

"This is really end-of-month corporate requirements and short-covering due to all the political noise going on," Buenaventura said.

Among Asia's weakest currencies this year, the peso has been hurt by fiscal and political instability in the Philippines.

It shed one peso or 1.7 percent of its value in the past week, initially on dollar buying to fund a commercial deal and later on worries of a fresh political crisis.

Traders said there was heavy dollar buying to fund a telecommunications deal, in which Deutsche Telekom AG is selling its entire stake of 24.8 percent in the second-largest Philippine phone firm Globe Telecom Inc to co-owners Ayala Corp and Singapore Telecommunications Ltd .

Globe was given the option to take part in the deal and has said it is buying back 12 million of its shares from Deutsche.

The deal was valued at $472 million.

The peso weakened further last week after a group of lawmakers moved to impeach Chief Justice Hilario Davide on allegations he misused public funds, raising the prospect of a battle between the legislature and judiciary.

abs-cbnNEWS.com/Reuters

28/10/2003

Bron : ABS-CBN

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