Forex reserves hit 3-month low
The country’s foreign exchange reserves slid to a three-month low of $81.41 billion in June partly as global gold prices fell alongside a weaker peso, preliminary Bangko Sentral ng Pilipinas data released Friday night showed.
The gross international reserves (GIR) level last month was the lowest since the $80.89 billion posted in March and lower than the $85.28 billion a year ago.
BSP Governor Nestor Espenilla Jr. attributed the drop in reserves from May’s $82.18 billion to “outflows arising from the BSP’s foreign exchange operations, payments made by the national government for its maturing foreign exchange obligations and revaluation adjustments on the BSP’s gold holdings resulting from the decrease in the price of gold in the international market.”
In late June, the peso weakened to an almost 11-year low as it slid to 50:$1 levels.
Espenilla nonetheless said the national government’s net foreign currency deposits as well as income from the BSP’s foreign investments partially offset the decline in dollar reserves.
The end-June GIR could cover 8.7 months’ worth of imports of goods as well as payments of primary income and services.
Also, the foreign exchange reserves level as of June was equivalent to 5.6 times the short-term external debt based on original maturity and 3.8 times based on residual maturity. The BSP defines short-term debt based on residual maturity as outstanding foreign debt whose original maturity is a year or less, plus principal payments on medium- and long-term loans of the government as well as the private sector that are due within the next 12 months.
As for net international reserves, or the difference between the GIR and total short-term liabilities, these also decreased to $81.39 billion last June from $82.16 billion in May.
Last month, the BSP projected 2017 dollar reserves to slightly decline to $80.5 billion, equivalent to 8.3 months’ worth of import cover, from end-2016’s $80.7 billion.
The BSP’s updated projection was lower than the previous $84.7 billion or equivalent to 8.8 months’ worth of imports.
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