Peso strengthens as oil prices fall

THE PESO appreciated against the dollar on Monday as oil prices fell due to a lockdown in China. — BW FILE PHOTO

THE PESO appreciated against the greenback on Monday as oil prices fell and amid growing infrastructure spending.

The local unit closed at 52.13 pesos to the dollar on Monday, earning two centavos on its 52.15 pesos. Ifnish Friday, based on data from the Philippine Bankers Association.

The peso opened Monday’s session at 52.18 pesos against the dollar. Its weakest display was at P52.30, while its intraday best was at P52.08 against the greenback.

Traded dollars fell to $778.55 million on Monday from $1.105 billion on Friday.

The peso strengthened as global oil prices fell, a trader said.

Reuters reported that fuel prices fell more than $5 on Monday on expectations of weaker fuel demand due to the lockdown in Shanghai as coronavirus infections there rose again.

Brent crude futures fell to $115.32 a barrel and were down $5.15 or 4.3% at $115.50 at 0731 GMT. Meanwhile, US West Texas Intermediate crude futures hit a low of $108.28 a barrel and fell 4.7% or $5.30 to $108.60.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the market is also pricing in increased infrastructure spending as it is an engine of import growth.

Data from the Budget and Management Department showed infrastructure spending in 2021 jumped by almost a third to 895.1 billion pesos. It also exceeded the target of 761.2 billion pesos for the year.

The rise was attributed to the low base in 2020 as well as spending on roads, flflood barriers, multi-purpose buildings, railways and airports, the agency said.

For Tuesday, Ricafort gave a forecast range of P52.05-52.20 per dollar, while the trader expects the local unit to move between P52.00-52.30 P.— Noble LWT with Reuters

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