PESO PLUNGES, NOW 55.09 PER DOLLAR
Manila, March 12, 2003 -- Increased demand for dollars from oil companies preparing for the looming US attack on Iraq pushed the peso past the crucial 55 to the dollar level today to close at 55.099 against the greenback.
Tourist belt money changers were offering 55.20 pesos for each US dollar, indicating a scarcity of dollar sellers.
At the official foreign exchange trading floor, volume rose to 137 million dollars as opposed to the thin trading in the past few days. Feverish trading brought the local unit closer to its all time closing low of 55.25 in Jan. 18, 2002, when former president Joseph Estrada was on the brink of being overthrown by a military-backed popular revolt. The dealer predicts the peso could sink further to 55.70 to the dollar in the coming weeks as uncertainties in the Middle East have forced businessmen to buy more dollars.
"The peso won't recover until the smoke has cleared, until there is a clear winner and a clear loser," the dealer said. "All the uncertainties in the world are magnified here in the market."
The dealer said the Bangko Sentral ng Pilipinas (BSP) released 90 million dollars in the market, in a "futile" attempt to halt the peso's decline.
The dealer also belied BSP deputy governor and officer-in-charge Armando Tetangco's claim that the peso's weakness was "temporary" and Finance Secretary Jose Isidro Camacho's statement that the peso would settle at 52 to 54 to the dollar once war fears eased.
"I don't think so. That's impossible," the dealer said. He did not elaborate.
Reported by: Sol Jose Vanzi
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