Philippine Foreign-Exchange Reserves Hit 3-Month Low in March

MANILA, PHILIPPINES – Foreign exchange reserves in the Philippines fell to USD80.4 billion as of the end of March from USD80.8 billion in February, the Bangko Sentral ng Pilipinas (BSP), the country’s central bank said.

The BSP said the country’s gross international reserves (GIR) dropped to its lowest in March since end-December, mainly due to government payments for maturing foreign debt as well as revaluation adjustments.

The value of gold in Bangko Sentral vaults dropped to USD7.437 billion from USD8.006 billion in the same comparable period, while foreign investments declined to USD450.6 million from USD594.9 million, the central bank reported Tuesday.

“The GIR level can cover 10.5 months’ worth of imports of goods and payments of services and income,” BSP Governor Amando Tetangco Jr. said in a statement.

“It is also equivalent to 4.9 times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity,” he added.

The BSP report showed that foreign exchange operations by the central bank went up to USD737 million from USD548 million. Net international reserves (NIR) decreased by $0.4 billion to $80.4 billion from $80.8 billion.

Meanwhile, foreign currency reserves held by central banks around the world declined to USD11.6 trillion in March after surging to a record USD12.03 trillion in August 2014, data compiled by Bloomberg showed.

The latest figure showed that the surge in global reserves, which had been the trend for a decade, has finally halted.

Analysts said shrinking reserves could make it harder for emerging market countries to boost their money supply and revive economic growth.

When currency reserves suddenly shrink, emerging asset prices are usually one of the first casualties, one economist said.

Contributing most to the decline were China, the world’s largest reserve holder, and commodity producers. China trimmed its foreign currency reserve to USD3.8 trillion in December after hitting a peak of USD4 trillion in June.

Russia and Saudi Arabia, the third-largest reserve holder, also cut its reserves since last year.  – BusinessNewsAsia.com

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