The peso depreciated against the US dollar on Monday as businesses prepared for high demand for goods in the fourth quarter.

The local currency closed at P56.52 per dollar on Monday, weaker by 0.615 centavos from P55.905 per dollar recorded last Friday, data from the Bankers Association of the Philippines showed.

Still, Rizal Commercial Banking Corp. chief economist Michael Ricafort said Monday’s level remained among the lowest in five months and was much better than P58.92 per dollar seen on 27 June.

Importing season

“This came amid the seasonal increase in importation in preparation for the seasonal increase in sales in the fourth quarter locally and in the exports market. This reflected a consistent pattern seen for many years,” he said.

Ricafort said the local currency can still support strong domestic consumption of goods and services as global crude oil prices have remained stable. “Cheaper oil prices help ease overall inflation,” he said.

“Nevertheless, the peso still posted a net appreciation recently versus the US dollar to somewhat catch up with the bigger appreciation in other Asian currencies for more than a month already or amid the Japanese yen’s sharp net appreciation versus the US dollar recently,” Ricafort said.