Small Exchange: Philippines central bank seeks forex data, Fed boosts liquidity for foreign banks and Tunisia’s forex recovery

Peter Terlato 29 August 2017 NEWS

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This week's currency news rounded up.

Philippine's central bank is seeking additional forex data

The Bangko Sentral ng Pilipinas (BSP) is proposing to implement new incentives for banks and institutions to hand over additional data related to interbank wholesale, retail, and the parallel market of non-banks.

BSP governor Nestor Espenilla says this tactic will further streamline foreign exchange rules and help ease the difficulty for consumers and corporations to comply with proper documentation and approval processes.

“We're engaging the industry (banks) and we want to get more data, more reporting, and we’re trying to uncover the reason why transactions are being done in the parallel market rather than with the banks,” he said.

The additional data gathered will be used to study and monitor the influx and outflow of foreign funds.

Last week the Filipino central bank warned traders and markets that it would not tolerate speculative attacks on its currency, the peso, after its value sank to an 11-year low.

Federal Reserve boosts liquidity of foreign central banks

The US Federal Reserve has provided US$36 million worth of liquidity to several foreign central banks in the last week, according to Federal Reserve Bank of New York.

The liquidity was offered through swap lines, established to combat the pressures faced by short-term funding markets, across the globe and minimise the risk that strains abroad could spread to US markets.

The European Central Bank swapped US$35 million with a term of 7 days at a rate of 1.66% while the Bank of Japan swapped US$1 million at the same term and rate.

The Federal Reserve retains swap arrangements with the Bank of Canada, the Bank of England, the European Central Bank, the Swiss National Bank, and the Bank of Japan.

Tunisia's forex reserves bumped up by loan

The World Bank issued a US$538 million loan to the Central Bank of Tunisia (BCT) last Thursday to help boost the north African nation's foreign currency reserves.

Xinhua News Agency reports Tunisia's reserves have recovered to 103 days of imports post-loan, after holding just enough for 90 days of imports in mid-August. The BCT attributed the reduced foreign exchange balance to extra pressures on trade and a disruption in the production of exports, including phosphate and petroleum.

This was the first time since December 2012 that forex reserves have dropped below 100 days of imports.

Each week Small Exchange sums up currency news from around the globe and looks into how it impacts exchange rates and options.

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