MANILA - Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla Jr. sought to allay worries over the continuing depreciation of the peso saying these concerns were "overdone."
The peso continued to weaken versus the US dollar, closing at 51.42 on Tuesday from 51.185 Monday, according to the Philippine Dealing System.
In a recent interview with an international consultancy firm, Espenilla said the peso‘s depreciation was moderate and controlled, and mirrored bullish economic growth.
"The movements of the peso are fully consistent with our flexible exchange rate policy that allows us to absorb market shocks and avoid the buildup of imbalances," Espenilla said in an interview with GlobalSources Partners which was released on Sunday.
"We do not target the exchange rate. But we stand ready to manage excessive volatility particularly if these reflect speculative activity," he added.
The BSP expects the peso to be broadly stable over the medium-term, backed by strong underlying economic fundamentals, ready market access, and robust international reserves.