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Trump’s remark pushed peso down, says banker

A banker belonging to one universal bank said the pronouncement of incoming US president Donald Trump that he’ll allocate trillions on dollars in infrastructure is pushing the peso down against the dollar.
The banker, who requested not to be named to avoid controversy, said Trump unknowingly created a stir in that remark, especially on countries that are dependent on dollars to survive.
“That statement will reverberate because many nations are dependent on dollars,” the banker, whose bank has grown to over 300 branches in just over five years, said.
The peso has been hovering not less than 49.75 against the dollar for the past almost three months now.
Although a weak peso is good for  millions of overseas Filipino workers and their loved ones, it is proven to be taking its toll on the Philippine foreign debts.
He said due to that remark, even the Fed will be required to review plans to raise interest rates. By nature, the Bangko Sentral ng Pilipinas (BSP) is dependent on the Fed as it observes closely all its moves, especially interest rates adjustments.
This year alone, some critics see the BSP raising overnight borrowing and lending rates by at least twice. It is unclear whether that observation is related to Fed’s future move.
Sources at the US financial markets see contrasting acts between the Fed and Trump as the first is viewed as a democrat, which is liberal in nature, while the latter is a known conservative.
The Fed is headed by Janet Yellin, who was appointed by outgoing President Barack Obama.   
It can be recalled that Trump, who will be inaugurated on January 20, 2017, promised to spend $1 trillion on his first year in office on various infrastructure projects.
It is unclear if this amount includes the cost of building a wall that will serve as border with Mexico near the Rio Grande river.

1 comment

  • L. A

    Isnt that a wake up call? Maybe, our local pawnshop operators can group together sans BAP to devise a way of starting to distance themselves from the use of the USD. Maybe, a bigger portion of their foreign currency allocation can go to Euro. Another alternative would be for those pawnshop operators masquerading as bankers to sound their counterparts in ASean to study seriously the creation of an Asean or Asian Dollar which they can call the Quintal. At the same time, Bangko Sentral should fasttrack the approval in the inclusion of the Vietnam and Russia currency as those allowed for conversion to pesos.

    L. A Tuesday, 10 January 2017 23:38 Comment Link

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