Foreign exchange
• Previous week: The peso has been moving steadily across the 46 territory in the previous week amid a depreciation trend. The peso traded at 46.47 to a dollar at the start of the week, then depreciated to 46.59 to a dollar on Thursday. The peso suffered its biggest decline for the week on Wednesday, when it hit 46.83 to a dollar. The peso ended the trading week at 46.86 to a dollar. Total trading volume reached $2.58 billiion.
• Week ahead: The Bank of the Philippine Islands (BPI) told its clients that the peso would likely continue to depreciate in the week ahead due largely to the expected strength of the dollar. “In light of the expected US-dollar rally, we expect the Philippine peso to trade downward, barring any strong positive local mover that would cap the continuing dollar outflow from foreign selling,” BPI said. It remains to be seen whether Fitch Ratings’s “positive” outlook for the Philippines would have an impact on peso-dollar trading.
August money supply
September 30, Wednesday
• July money supply: The Bangko Sentral ng Pilipinas (BSP) reported that the July domestic liquidity—broadly measured as M3 by the central bank—grew at 8.5 percent in July this year relative to the level seen in the same period last year. The total absolute value of cash in the economy is at P7.7 trillion as of July. M3 growth in July was slightly lower than the revised 9.3-percent expansion recorded in June.
• August money supply: Economists expect no surprises in M3 growth in August. First Metro Investment Corp. and University of Asia and the Pacific Capital Markets Research said domestic liquidity growth will likely be at single digit. The BSP has also said earlier that domestic liquidity conditions continue to be supportive of growth and that they will monitor any developments that may arise from this.