Dollar reserves hit their highest level in three months at the end of April
The country’s dollar reserves reached $ 107.25 billion at the end of April, supported by the proceeds of national government bond issues and a higher valuation of the central bank’s gold holdings.
April’s gross international reserves (GDI) increased 2.65% from the level of $ 104.48 billion at the end of March and 17.9% from the $ 90.942 billion a year ago. year, according to data released Friday by the Bangko Sentral ng Pilipinas. The level at the end of April is also the highest since the $ 108.674 billion seen at the end of January.
“The month-over-month increase in the GIR level reflects the proceeds of the national government’s global and samurai bond issues, which have been deposited with the BSP,” the central bank said in a statement.
The Treasury Office raised 24.2 billion pesos or 55 billion yen in March through three-year yen-denominated bonds. The proceeds will be used for budget support and the repayment of debt maturities.
In April, the government raised another 122.4 billion pesos or 2.1 billion euros through four, 12 and 20-year euro-denominated debt securities.
“An upward adjustment in the value of BSP’s gold holdings due to the increase in the price of gold in the international market has contributed to the increase in the level of GIR,” added BSP.
On the other hand, the PASB has said that outflows to service the national government debt have become a factor in part offsetting the stacking of dollar reserves.
A sufficient level of currency buffers protects an economy from market volatility and ensures that the country is able to pay its debts in the event of an economic downturn.
The TIF at the end of April is sufficient to cover 12.3 months of imports of goods from the country and payments for services and primary income.
This level is also equivalent to about 7.5 times the country’s short-term external debt on the basis of original maturity and 5.2 times on the basis of residual maturity.
“This [GIR level] would help strengthen the country’s external position and, in turn, support and fundamentally support the country’s credit rating, ”said the chief economist of Rizal Commercial Banking Corp. Michael L. Ricafort.
BSP data showed foreign currency deposits jumped 39.7% to $ 5.081 billion, from $ 3.635 billion at the end of March and 54.5% from $ 3.288 billion at the end of April 2020.
Gold reserves were valued at $ 9.310 billion, up 2.16% from $ 9.113 billion a month earlier and 16% from $ 8.015 a year ago.
The country’s reserve position at the International Monetary Fund (IMF) rose 1.22 percent to $ 803.6 million, from $ 793.9 million at the end of March and 38.4 percent from 580.4 million dollars from last year.
Meanwhile, Special Drawing Rights – or the amount the country can draw from the IMF – stood at $ 1.214 billion for the second month in a row. However, it rose 3.7% from $ 1.171 billion at the end of April 2020.
Foreign investment also rose 1.2% to $ 90.843 billion, from $ 89.726 billion a month earlier and 16.6% from $ 77.886 billion a year ago.
BSP expects GIR to reach $ 114 billion this year.
The country’s dollar buffers hit a record high of $ 110.117 billion at the end of 2020.