Overseas news
The US dollar broadly weakened against its peers after officials from Japan and China commented that they would support their currencies against massive depreciation from speculative bets.
These statements hint at the steps that the monetary authorities in these countries are ready to take to keep their respective currencies strong.
The People’s Bank of China (PBOC) cracked down on bulk US dollar purchases by requiring domestic firms to go through an approval process when purchasing $50 million or more. The Chinese yuan has depreciated against the US dollar by 6% year-to-date.
Transactions of this size can have a sizeable impact on foreign exchange and currency strength, and so this new requirement may help stabilize the yuan’s value.
Local developments
The Department of Trade and Industry (DTI) may consider lifting the price ceiling on rice after 2 weeks. This is when the local harvest and arrival of imports should provide more than 2 million metric tons of rice.
The availability of basic food staples such as rice is an essential part of a nation’s food security. This has led to the recent price ceiling that has caused issues with some retailers.
Foreign direct investment (FDI) net inflows to the Philippines dropped to the lowest in 5 months at $484 million in June 2023. This happened due to concerns over slowing economic growth, elevated inflation, and high interest rates.
A reduction in FDI means that there will be less “new” money entering the country’s financial system to provide more jobs and help the economy grow.
The weakening of the dollar and the reduction of local FDI may not pull investment value down in the short term, although things could still change later on. For now, continuing to follow your strategy might be the right step forward.
