3 years old,self-gratification

hi, I have a problem. My 3 1/2 years old daughter often announces me that she is going to her room to stay by herself, this is her way to tell me she is going to spank the monkey.

I am worried because this is becoming very frequent. Basically each and every time she is bored or not receiving 100% of my attention, she will do this. I am not against self-gratification, but I was raised in a very Catholic and repressive family and it's hard to let go the feeling that something is going wrong .

We agreed that she is allowed to do that in the privacy of her room. I also try to encourage her to do something else, (usually with poor results). Another thing who bothers me is that she will use socks or towels to do that and asks me for a towel...I don't know what to answer or what to do...

I asked her why she is wanting to touch herself and she said, "I just like it".

Me and my daughter spend lots of time together and she receives plenty of physical contact. I am also sure she was not victim of sexual abuse. I think it's fine and normal to spank the monkey for adults and children . But I don't know how I handle it. I am sure she can feel that the matter is a little troubling to me, b/c she usually asks me the permission to do that.

Please help....