MANILA, Philippines – Bangko Sentral ng Pilipinas (BSP) is likely to investigate further reports that the peso appreciated sharply on Tuesday (July 20) despite the financial markets being closed due to the Eil al-Adha holiday.
The sharp rise in the peso was reflected in unofficial currency conversion rates on Google.
In a statement, however, BSP Governor Benjamin Diokno said regulators questioned whether legitimate transactions were made at the peso’s alleged high of P42.83 to $ 1, representing a 15 percent strengthening from the currency’s earlier official close of P50.34 .
“That anyone would be willing to trade at these off-market prices using these apps may warrant further investigation,” he said in a cell phone message to reporters.
The BSP chief explained that the supposed abrupt peso revaluation was captured by exchange rates from Google as well as a particular social media platform.
“We would like to emphasize that the source feed is not Bloomberg or the Bankers Association of the Philippines,” he said. “The official sources are only Bloomberg and BAP.”
The BSP believes that these applications, which showed the drastic fluctuation in the peso-dollar exchange rate, had an error in the source feed.
“July 20 was a Filipino holiday and the domestic markets were closed,” Diokno said. “This means that there was no official live data source for the spot market.”
He explained the current rule that the official exchange rate on holidays will be the rate for the previous weekday.
In addition, BSP observed various currency platforms, such as Bloomberg and Reuters, which BSP uses for market data sources, and no one showed this drastic movement.
“Furthermore, we strongly doubt that significant transactions were made at these prices, as these would certainly be ‘off market’ and would be subject to internal reviews of these platforms,” he said.
“For the above reasons, we believe that the particular applications for dollar peso pricing were caused by a price feed error, exacerbated by the Philippine holiday,” Diokno said.
This announcement was reiterated by Bankers Association of the Philippines President Wick Veloso, who noted that the Muslim holiday meant that the markets were closed and that there was no live feed and no official data source for the spot currency market.
“We observed various other currency apps such as Bloomberg and XE, and no one showed this drastic step,” he added.
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