The Bangko Sentral ng Pilipinas (BSP) could examine the peso’s “lightning crash” at P43: $ 1 from its P50 level on Tuesday, July 20, which was a public holiday, and encountered a problem or an “error.” feeds’ price from a currency trading (FX) application, said the top official at BSP.
“Whether someone is willing to trade at these off-market prices using these apps may warrant further investigation,” BSP Governor Benjamin E. Diokno said.
Diokno, responding to calls for a possible investigation, assured the public that the “flash crash” was a capture by Google and that it has spread on social media. “We would like to point out that the source feed is not Bloomberg nor the Bankers Association of the Philippines (BAP). The official sources are only Bloomberg and BAP, ”he said.
The BSP chief said that forex platforms such as Bloomberg and Reuters – “this is what the BSP uses for market data sources” – showed no “drastic drops”.
“We highly doubt that there were any significant transactions processed at these rates as they would definitely be ‘off-market’ and subject to internal reviews of these platforms,” Diokno said.
Diokno said that while these apps showed a drastic drop in the exchange rate, it was a power source issue. “We believe the specific USD / PHP pricing requests were caused by a pricing feed error, exacerbated by the Philippine vacation.”
As July 20 is a public holiday, there were no domestic markets. “This means there was no official live data source for the spot market. The rule we have is that on public holidays the official rate in effect will be the rate of the previous working day, ”explained Diokno.
On Wednesday, the peso closed at P50.35 against P50.34 on Monday July 19.
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