Philippine demand for capital goods imports, spurred by faster economic growth, may help counter the effect of surging inflows of funds from abroad and cool the peso’s gains, central bank Assistant Governor Cyd Amador said.
“The peso could likely move within a narrower range, be more stable and less volatile,” Amador said in an interview yesterday in Davao City. “On the one hand, the country’s bright growth prospects and expectations of its continuing strength could serve to draw in more foreign money. On the other hand, import requirements of the economy could rise as public and private investments increase.”
“The strength of the peso is a reflection of an economy that’s increasingly showing better fundamentals,” said Euben Paracuelles, an economist at Nomura Holdings Inc. in Singapore. Photographer: Julian Abram Wainwright/Bloomberg
Monetary easing from Japan to the U.S. has spurred demand for higher-yielding assets and boosted inflows into emerging markets, prompting policy makers to take action. Bangko Sentral ng Pilipinas Governor Amando Tetangco said last week he’s studying more measures to counter the impact on the nation’s currency and economy. Banco de Mexico Governor Agustin Carstens said yesterday that capital flows to emerging markets and some advanced nations may lead to asset bubbles.
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