Philippines president Benigno Aquino’s spokesman said yesterday (September 20) that the government would support the central bank in its evaluation of whether the peso is being manipulated by market speculators.
Amando Tetangco, the country’s central bank governor, has said that the currency’s recent movements have been in line with the region's, and that the central bank will act "only to contain excessive volatility" in the currency.
The peso weakened to PHP43.70 against the US dollar yesterday. This is no bad thing for exporters but the Philippine Exporters Confederation was concerned currency speculation might be to blame.
The spokesman said that while he felt the peso’s value was "comfortable" but that the government would support the central bank’s evaluation.
Philippine exporters are urging the government to be vigilant against currency speculators. Investors, governments and exporters alike are becoming increasingly agitated about the risk of hot money damaging local economies.
Countries including Japan and Switzerland have both intervened on their respective currencies, with the former lobbying for multilateral help and the latter swearing an oath the act on the franc if it reaches CHF1.20 against the euro.
It appears that the government is supporting Tetangco in an indirect warning to the market not to play with the peso. The question is how much are his words worth?