Peso ends August at 5-month high vs. US dollar

The Philippine peso closed the last trading day of August on a strong note amid the central bank's projection that inflation fell this month.

The local currency gained 17.2 centavos against the US dollar, closing at P56.111:$1 on Friday from P56.283:$1 on Thursday.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso’s August 30 finish was its strongest in five months when it closed at P56.03:$1 on March 21, 2024.

The local unit’s strength came on the heels of the Bangko Sentral ng Pilipinas’ (BSP) statement that inflation most likely dropped in August, according to Ricafort.

In its forecast, the BSP said that the August inflation rate may settle within the range of 3.2% to 4%, a deceleration from the 4.4% seen in July.

Moreover, Ricafort said “the peso continued to appreciate recently versus the US dollar to somewhat catch up with the bigger appreciation in other ASEAN/Asian currencies over the past month, amid the Japanese yen’s sharp net appreciation versus the US dollar recently.”

“The peso also recently posted a net appreciation versus the US dollar, partly amid the tail-end in the seasonal increase in OFW remittances and conversion for tuition and other school-opening payments/expenditures…,” Ricafort said. — VBL, GMA Integrated News