Small Exchange: India tourism FEEs rise, Pakistani reserves tumble and Philippines central bank battles speculation
This week's currency news rounded up.
FEEs from tourism in India continue to swell
Foreign Exchange Earnings (FEEs), as a result of tourism, were slightly higher for the month of July 2017 at US$2.325 billion, compared with FEEs in July 2016 (US$2.125 billion) and July 2015 (US$1.884 billion).
Business Standard reports that July 2017 earnings were 9.4% higher than the earning for the same month one year earlier, while positive growth in July 2016 was 12.8% greater than that of July 2015.
However, during the first six months of this year (January-July 2017) FEEs totalled US$15.555 billion, representing a growth rate of 20.2% compared to the same period in 2016, while growth between the first six months of 2015 and the same period in 2016 only hit 7.1%.
Pakistani forex reserves can't stop tumbling
In its latest report, the State Bank of Pakistan (SBP) declared foreign exchange reserves have sunk to their lowest levels in over a year.
Reserves slipped $88 million in just one week to total US$19.94 billion as of 11 August 2017.
Local media report the strong decline in reserves can be attributed to payments on external debts. For example, the SBP took a loan of US$1.5 billion from the country's commercial banks in June 2017.
Foreign reserves held by the commercial banks hit a six-year high this month.
Philippine central bank warns against speculative aggression
The Bangko Sentral ng Pilipinas (BSP) has warned it will not tolerate any speculative attacks on its currency, the peso, emphasising its belief that the exchange rate has "sufficiently adjusted" to an appropriate level.
Despite dropping to an 11-year low late last week, Governor Nestor Espenilla said the peso "can be expected to regain relative stability going forward" during a statement released on Monday.
However, given recent market uncertainty, Espenilla believes speculators may be tempted to take advantage of the currency depreciation by "exaggerating for financial gain an otherwise healthy price correction to recover some of the price competitiveness".
"The BSP will not tolerate such speculative behaviour and stands ready to use its very ample international reserves and deploy its full policy and regulatory arsenal if necessary," he said.
Each week Small Exchange sums up currency news from around the globe and looks into how it impacts exchange rates and options.