Stocks seen to track interest rates.

Stock analysts see the stock market temporarily resting on its laurels this week after receiving a mild boost from the peso the past week.

Although shy of a standing ovation, the market - as measured by the 33-share Philippine Stock Exchange composite index - recovered its poise by 11.94 points or 0.92% to close at 1,306.17 last week.

Value turnover, however, was still slim with only P364 million worth of stocks bought and sold per day last week.

Grace Cerdenia, research head at 2TradeAsia.com, said market players are expected to track the movement of interest rates after monetary authorities recently raised liquidity reserve requirements or a key indicator of the available money in the financial system by two percentage points.

Raising liquidity reserve requirements has the effect of "mopping up liquidity" or constricting money supply.

Monetary authorities use this as a tool to prevent speculation in the foreign exchange market.

But like a double-edged sword, analysts believe raising liquidity reserve requirements has …