| IMF urges continued buildup of forex reserves
THE INTERNATIONAL Monetary Fund has urged the Bangko Sentral ng Pilipinas to further beef up its gross international reserves, now at a record high of $23.76 billion, while maintaining a flexible exchange rate policy. In its 2006 country report, the IMF executive board said the BSP's current policy to deal with the upward pressure on the exchange rate was "broadly appropriate" but cited the merits of further building up the GIR while the foreign inflows were strong. "Going forward, we urge continued exchange rate flexibility, even though further reserve accumulation might be justified given that the exchange rate does not appear to be mis-aligned," the IMF board said. The peso is now trading at a six-year high against the US dollar. On Friday, the local currency peaked at 48.265 before closing at 48.305 to $1.
Yen slides, market sees few surprises from G7
TOKYO -- The yen closed in on a four-year low against the dollar and a record trough versus the euro on Friday before a Group of Seven finance ministers' meeting that is unlikely to seriously tackle the yen's weakness, investors said. The euro also drew support from comments from ECB President Jean-Claude Trichet, who signaled on Thursday that rates could rise in March and possibly later on in the year. The ECB left rates unchanged at 3.5 percent in the previous session. Market focus is on the statement that will follow the two-day G7 gathering, which starts in Essen, Germany, later in the day. Some investors were also selling the yen ahead of a market holiday in Japan on Monday. "The market is betting that the yen won't be included in the communique, which is why we're seeing buying in currencies against the yen," said a forex trader at a European investment bank.
Wall St Week Ahead
NEW YORK (Reuters) - U.S. stocks may rally next week if the early stages of the earnings season yield positive results and U.S. data shows price pressures are moderating enough to keep interest rates steady.
Tech bellwether Intel Corp. (INTC.O: Quote, Profile , Research), financial powerhouse Citigroup Inc. (C.N: Quote, Profile , Research) and this week's headline-grabber Apple Inc. (AAPL.O: Quote, Profile , Research) all report next week and should offer insight into how the corporate sector fared in the final stages of 2006, when economic growth was slowing.
"It's going to be an action-packed week and certainly earnings are at the top of the list," said Hugh Johnson, chief investment officer of Johnson Illington Advisors, in Albany, New York.
"As long as there are no big earnings shocks, as long as earnings come in better than forecast, I think the stock market will edge its way higher," he said.
Asia seeks to protect itself from rapid investment
TOKYO: Asian nations need better protection to prevent "massive" capital inflows from damaging their economies, central bank governors from the region agreed Monday. The governors noted their success in putting the regional economy on sound footing and strengthening the financial system since the end of the last crisis, during which foreign capital flight made Asian currencies fall in 1997 and 1998. "It is, and will surely be, the most difficult task for any monetary authorities to maintain the stability of foreign exchange rates, the free flow of capital and the independence of monetary policy simultaneously," Toshihiko Fukui, governor of the Bank of Japan, said at a symposium to mark the 10th anniversary of the regional currency crisis. "In order to increase the ability to absorb external shocks from massive capital flows, the priority seems to be to strengthen the function of foreign exchange and financial markets," he said.
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