Bloomberg News

Philippines to Impose 187.5% Charge on NDFs, Tetangco Says

October 26, 2011

(Updates with peso in fourth paragraph.)

Oct. 26 (Bloomberg) -- The Philippine central bank will ask lenders to set aside more capital to cover non-deliverable currency forwards, Governor Amando Tetangco said today

Bangko Sentral ng Pilipinas will keep a plan to impose a 187.5 percent market-risk weight on NDFs, Tetangco said in an e- mail response to questions in Manila. “It’s a macroprudential measure designed to address possible systemic risk,” he said.

The central bank will remain mindful of risks to inflation, such as uneven capital flows that may fuel volatility in foreign-exchange markets, Tetangco said yesterday.

The peso, which reached a three-year high of 41.903 per dollar on Aug. 1, has advanced 0.9 percent this month.

--Editors: Andrew Janes, Sandy Hendry

To contact the reporter on this story: Karl Lester M. Yap in Manila at kyap5@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.


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