Billion-dollar transaction sends forex rate cresting at P42.89:$1

A $1.102-billion dollar transaction Wednesday pushed the peso-dollar exchange rate to P42.89:$1, a centavo shy of the peso’s strongest level of P42.88:$1 on May 11, according to trading results at the Philippine Dealing System (PDS).

The rate even hit an intra-day high of P42.83:$1.

"The fundamental factors that influenced the exchange rate are still positive for the peso… The balance of payments (BOP) remains in surplus, so you have more dollars coming in than more dollars going out," Bangko Sentral Gov. Amando Tetangco Jr. explained.

In January-May this year, the BOP surplus widened by 78 percent to $4.8 billion from $2.7 billion booked the first five months of 2010.

The payments surplus is projected to expand to $6.7 billion this year, from a record $14.4 billion last year.

According to the PDS, P334.15 billion worth of dollars was traded in June, the highest since P308.29. billion changed hands in January.

In January-June this year, the volume of trading at PDEx totaled P1.42 trillion. It was a hefty P5.4 trillion for the whole of 2010.

This first week of July is the start of the third quarter, when importers and exporters begin building up inventories in preparation for business in the last three months of the year.

In July last year, the PDS trading volume was P647 billion, followed by P803 billion in August. — ELR/VS, GMA News