Dollar reserves fall to 7-month low of $80.787 billion in July
The peso at an almost 11-year low level pulled the country’s dollar reserves to $80.787 billion in July, the lowest in seven months, preliminary Bangko Sentral ng Pilipinas data released Monday showed.
The gross international reserves (GIR) level last month was below those recorded monthly in January to June, although higher than the $80.692 billion in December last year.
The GIR in July was also down from $85.506 billion a year ago.
In a statement, BSP Governor Nestor A. Espenilla Jr. attributed the further drop in reserves from June’s $81.321 billion to “outflows arising from the BSP’s foreign exchange operations and payments made by the national government for its maturing foreign exchange obligations.”
Since late June, the peso has been trading at the 50:$1 level, the weakest since 2006.
As such, the country’s dollar reserves fell for the second straight month in July.
But Espenilla said revaluation adjustments on the BSP’s gold holdings due to higher global prices, 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-July GIR can cover 8.6 months’ worth of imports of goods as well as payments of primary income and services.
Also, the dollar reserves level as of June were equivalent to 5.5 times the short-term external debt based on original maturity, as well as 3.7 times based on residual maturity.
The BSP defines short-term debt based on residual maturity as outstanding foreign debt whose original maturity was a year or less, plus principal payments on medium- and long-term loans of the government as well as the private sector that were 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 $80.78 billion in July from June’s $81.32 billion.
In June, the BSP projected 2017 dollar reserves to slightly decline to $80.5 billion, equivalent to 8.3 months of import cover, from end-2016’s $80.7 billion.
The BSP’s updated projection was lower than the previous $84.7 billion or 8.8 months of imports. JE
