Peso surges against $ first time since 2000

May 22 | Updated: May 23 2007, 05:30am hrs
The Philippine peso appreciated the most since March 2003 after President Gloria Arroyo said the currencys strength is helping keep inflation low. The peso gained beyond 46 to the dollar for the first time since September 2000 as the benchmark stock index climbed to a record.

Central bank governor Amando Tetangco said on Monday that a strong peso helps achieve price stability. The presidents comments on Tuesday are boosting sentiment, attracting investors into Philippine markets, said Ramon Lim, head of treasury at Philippine National Bank in Manila. The currency climbed as much as 1% to 45.835 against the dollar and traded at 45.87, according to Tullett Prebon Plc, the worlds second-largest inter-dealer broker.

We look forward to many more unheard of highs for financial markets, Arroyo said at the stock exchange in Makati, Manila. The pesos rise caps price increases, Arroyo said.

Inflation of 2.3% in April was near a seven-year low, easing concern that the central bank will raise interest rates and encouraging investors to buy the nations equities. The Philippine Stock Exchange Index reached a record for a third day. The central bank will let market forces determine the pesos movement, deputy governor Diwa Guinigundo said.

The Indonesian rupiah extended gains to a three-year high against the dollar on speculation overseas investors brought in funds to participate in a government bond auction on Tuesday.

The bonds offer the highest yields in Asia after Pakistan and Sri Lanka, with 10-year notes offering 8.89%. Indonesia sold 4.3 trillion rupiah of 20- and 30-year local-currency bonds, with investors submitting total bids of 21 trillion rupiah for the debt on offer, according to the finance ministry.

Bloomberg