July dollar reserves dip to lowest since 2011

The dollar reserves of the Bangko Sentral ng Pilipinas (BSP) has dipped to its lowest level in almost seven years at the end of last month as monetary authorities used up more hard currency to pay for foreign obligations and temper the volatility of the peso.

In a press statement, the Bangko Sentral ng Pilipinas said its gross international reserves declined to $76.89 billion as of end-July 2018 – the lowest level of dollars since the $75.3 billion tallied at the end of 2011.

The July reserve level was lower than the $77.53 billion level recorded in the previous month due mainly to outflows arising from the payments made by the national government for its maturing foreign exchange obligations, foreign exchange operations of the BSP, and revaluation adjustments on the BSP’s gold holdings resulting from the decrease in the price of gold in the international market.

These were partially tempered by the government’s net foreign currency deposits as well as the BSP’s income from its investments abroad.

“Nonetheless, the end-July 2018 level of gross international reserves remains as an adequate external liquidity buffer and is equivalent to 7.4 months’ worth of imports of goods, and payments of services and primary income,” BSP Gov. Nestor Espenilla Jr. said.

It is also equivalent to 6.1 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.

Net international reserves, which refer to the difference between the BSP’s GIR and total short-term liabilities, likewise decreased by $630 million to $76.89 billion as of end-July 2018, from the end-June 2018 level of $77.52 billion. /atm