BSP TIGHTENS NOOSE ON FOREX SPECULATORS
MANILA, February 2, 2004 (STAR) By Des Ferriols - The Monetary Board (MB) has directed the Bangko Sentral ng Pilipinas (BSP) to crack down on forex speculators and mete out punishments that would "teach banks a lesson," especially repeat violators.
BSP Governor Rafael Buenaventura said the directive was prompted by the recent sharp weakening of the peso against the dollar which could be exacerbated by speculation if the BSP did not clamp down on forex traders.
Buenaventura said the BSP would be strict on repeat violators, stressing that the BSP is prepared to impose stiffer sanctions against banks found speculating on the peso-dollar exchange rate.
"Banks normally face fines when they are caught violating our rules, but thatís not all we can do," Buenaventura said. "There are other penalties that we can impose. We can suspend their forex trading for a few days or we can suspend their license altogether," he warned.
As the peso plummeted to record lows, the BSP said it was on the look out for possible speculation by banks that want to take advantage of the political uncertainties.
BSP Deputy Governor Alberto V. Reyes told reporters that the BSPís roving teams have been fielded since the peso became unusually volatile last year.
"We would not hesitate to impose stiffer sanctions on banks and bank officers that we find violating our rules on forex trading," Reyes said.
According to Reyes, there were no indications of widespread and system-wide splitting of accounts where dollar trades are split into several transactions in order to circumvent the $5,000 limit per individual account.
"Detecting splitting of accounts usually takes a lot longer and even if there is splitting going on, we do not think it would be widespread enough to actually have an impact on the exchange rate," Reyes said.
Reported by: Sol Jose Vanzi
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