PESO EDGES CLOSER TO P55:$1

Manila, August 2, 2003 (MALAYA) The peso yesterday touched a low of 54.96 to the US dollar, dangerously near the 55.16 low it hit last March at the height of investor nervousness about the US attack on Iraq.

The peso's record low against the dollar was 55.75 in January 2001.

The peso was under pressure on rumors of more "unauthorized troop movements" following last Sunday's Makati siege.

Traders said the Bangko Sentral sold $40 million at the spot market which helped the peso close at 54.87, still down from Thursday's close of 54.72.

BSP Gov. Rafael Buenaventura called on market participants not to speculate as this could compound the pressures on the peso.

"We asked the banks not to take advantage of the situation. But I was told that it (pressure) was predominantly month-end requirements and low (dollar) inflows," Buenaventura told reporters.

Total volume of transactions at the Philippine Dealing System (PDS) amounted to $168 million.

"There was short-covering ahead of the weekend. The market participants are a little edgy from what happened last Sunday and no one wants to get caught oversold in dollars," a bank trader said.

A commercial bank trader said the peso will likely be at 55.60 in the near-term.


Reported by: Sol Jose Vanzi

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