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Friday, March 29, 2024

GIR level hits $107.25 billion in April–BSP

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The country’s dollar defenses grew further in end-April this year, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.

BSP Governor Benjamin Diokno told reporters that the country’s gross international reserves (GIR) hit $107.25 billion in April this year, up $2.77 billion from the previous month’s level.

The country’s GIR is the level of foreign-exchange holdings that is being managed by the Central Bank during a given period. The GIR is a crucial component of the economy as it is often used to manage the country’s foreign-exchange rate against excess volatility.

The Philippines GIR has been rising steadily for the whole of 2020 amid the pandemic, as the local currency remained strong against the US dollar.

At this level, the BSP said, the buffer is equivalent to 12.3 months’ worth of imports of goods and payments of services and primary income.

It is also about 7.5 times the country’s short-term external debt based on original maturity and  5.2 times based on residual maturity.

Diokno attributed the GIR expansion to the inflows that were mainly from the proceeds of the national government’s (NG) ROP Global and Samurai Bond issuances, which were deposited with the BSP.

The governor also said an upward adjustment in the value of the BSP’s gold holdings due to the increase in the price of gold in the international market contributed to the higher GIR level.

The country’s GIR could have been higher, however, if not partly offset by the outflows from the NG’s payments of its foreign-currency debt obligations.

The Philippines’s ability to shore up its dollar defenses amid the pandemic has been lauded by local and international economists.

In January, Fitch Ratings said the BSP’s ability to maintain a high level of GIR remains credit strength for the economy.

Read full article on BusinessMirror

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