Palace official: BSP intervening to keep peso-$ rate smooth

The Bangko Sentral ng Pilipinas has been intervening in the foreign exchange market to “smoothen out the volatility" in the exchange rate fluctuation, Malacañang said Wednesday. The central bank is not fighting against the market, but simply making sure that exchange rate fluctuations are not violent or too volatile, Presidential Communications Development and Strategic Planning Secretary Ramon Carandang told reporters at the Palace As to how long the Bangko Sentral will intervene in the market, Carandang said he will not place within a time face but that it will depend on what actions the BSP intends to take. Asked about the level at which the peso’s strength could be considered dangerous, he replied: “It’s all relative." He allayed fears of a repeat of the 1997 Asian financial crisis that brought most Southeast Asian economies to a crash because of currency speculations. “But again, we've learned the lesson from 1997. You cannot force your currency to where you want it to go. It's a function of market forces that are in many cases beyond our control," Carandang said. “But again, there are currency swap agreements in place. So the ability of central bankers in the region is much better than it was in 1997 and we're not even at a point where we're even comparing it to 1997." Carandang said that government is concerned by the strong peso but that 42:$1 is a manageable rate. “Yes, it's becoming a concern already. We know that the exporters are worried, that it may have an impact. We know that overseas Filipinos are worried about that and we're starting to think of what can be done about it," he said. Carandang said the strengthening of global currencies against the dollar was more a concern of Thailand during the 17 Asean Summit last week because the baht has reached 28-29:$1, which is where the Thai currency was before the 2007 financial crisis. “It's something that we will probably be feeling more acutely in the first quarter of next year, he said. “Right now, it's manageable and I’m happy to report that other countries are feeling the appreciation of their currencies than we are. So, to some extent we're cushioned from the effect," he added. The peso closed at 42.590:$1 on a trading volume of $964.14 million Wednesday, from 42.775:$1 with $1.082 billion changing hands Tuesday. — VS, GMANews.TV