PH dollar reserves inched up in October
Foreign currency inflows pushed the Philippines’ dollar reserves higher in October—a phenomenon that boded well for the strength of the peso and industries that bought raw and intermediate materials from abroad.
Preliminary showed that the country’s gross international reserves rose by $120 million to $85.7 billion as of end-October 2019 from a revised $85.58 billion at the end of the previous month, according to Bangko Sentral ng Pilipinas Governor Benjamin Diokno.
“The month-on-month increase in the [dollar reserve] level reflects the national government’s foreign currency deposits and the BSP’s income from its investments abroad,” Diokno said in a statement.
“However, the increase in reserves was partially tempered by payments made by the government for servicing its foreign exchange obligations,” the BSP chief added.
He explained that the end-October 2019 level of gross international reserves served as an ample external liquidity buffer and was equivalent to 7.5 months worth of imports of goods and payments of services and primary income.
It is also equivalent to 5.5 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.
Net international reserves—which referred to the difference between the BSP’s gross dollar reserves and total short-term liabilities—likewise increased by $120 million to $85.69 billion as of the end of October 2019 from the end-September 2019 level of $85.57 billion.
At its lowest level in October last year, the country’s dollar reserves dipped to $74.7 billion. This was reversed only after the BSP completed its aggressive string of anti-inflation interest rate hikes, thus making peso-denominated assets attractive once more to investors and fund managers.
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