(Bloomberg) --
The Philippine central bank doesn't need to intervene in the currency market even after the peso climbed to a three-month high this week, said Felipe Medalla, a member of the policy-making Monetary Board.
If the peso “is overshooting, maybe the central bank should do something about it. But I don't think it's overshooting,” Medalla said in an interview in Manila. “Even if we do nothing, it will self correct.”
The peso is the best performer among the actively traded Asian currencies in the past month, trading this week at its strongest against the dollar since July 31. It climbed to 50.92 per dollar earlier on Thursday before closing at 51.24 in spot market in Manila.
The dollar-peso rate forecast by bankers in the central bank's survey “is much higher than we have now,” Medalla said late Wednesday. The peso's rise “is not a source of concern,” he said, echoing comments made by Governor Benjamin Diokno.
Diokno Says Philippines Hasn't Intervened in FX 99% of the Time
Medalla, a former economics professor like Diokno, said monetary authorities tend to have a neutral view on exchange rate. “If it becomes too weak, people start selling. If it becomes too strong, people start buying and we don't really have to do very much.”
Jonathan Ravelas, the chief market strategist at Manila-based BDO Unibank Inc., said the dollar has been oversold.
To contact the reporter on this story: Ditas Lopez in Manila at dlopez55@bloomberg.net
To contact the editors responsible for this story: Cecilia Yap at cyap19@bloomberg.net, Clarissa Batino
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