The Bankers Association of the Philippines (BAP) has pledged to be ‘part of the solution’ to maintain order in the domestic financial market after the Bangko Sentral ng Pilipinas (BSP) issued a stern warning against speculators currencies while the peso trades almost all the time. dip against the US dollar.
“With global headwinds negatively affecting inflation and exchange rates across the globe, the BAP joins national efforts to minimize its impact on our people by avoiding activities that can only worsen the situation,” said BAP president Antonio C. Moncupa said in a statement. statement on Wednesday.
“In order to be part of the solution, the banking industry continues to work closely with the BSP for orderly, fair and transparent markets minus the unproductive activities that only harm the public,” he added.
The influential US Federal Reserve has implemented a series of aggressive interest rate hikes this year to rein in soaring inflation, causing a disruptive depreciation of currencies around the world.
The peso alone has weakened more than 15% against the greenback this year after hitting a record high of 59, putting further pressure on domestic inflation.
The BSP believes that the situation has been aggravated by speculative trading. It has sought to partially remedy the situation by imposing stricter foreign exchange reporting requirements on the local banking community, which was revealed earlier by Inquirer’s Biz Buzz.
The BAP said the statement “reaffirms its commitment to help maintain the orderly functioning of the fixed income and foreign exchange markets.”
It comes a week after the BSP warned speculators ‘not to take unfair advantage of changing market conditions’.
“It doesn’t help the Philippine peso; it does not help the Philippines,” the BSP had said.
The banking association also expressed support for the BSP’s policy initiatives “toward liberalization and transparent price discovery, including the conduct of its oversight mandate that ensures orderly markets.”
“Together we will work against speculative activities that tend to distort market prices and harm the economy,” the BAP said.
Local inflation rose to 6.9% in September, faster than the previous month’s 6.3% rise, on more expensive food and energy.
Meanwhile, BSP Governor Felipe Medalla said he remained “very active” in mitigating volatility in the currency market. The latest BSP data showed that monthly dollar reserves fell by $2.4 billion to $95 billion at the end of September.
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