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RP dollar reserves rise in March |
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By Arnold S. Tenorio, Senior Reporter
The Manila Times, Tuesday, 06/04/2004 The country’s dollar hoard as of end-March rose to at least $16 billion, according to Bangko Sentral ng Pilipinas Gov. Rafael B. Buenaventura. The March stash represented an increase from the $15.765 billion level in the country’s gross international reserves in end-February. At last month’s level, the country’s dollar reserves were enough to pay for about 4.5-months worth of imported goods and service payments. This was a slight increase from the 4.4-months equivalent of the February dollar hoard. The end-March reserves, likewise, could enable the country to pay its short-term debt 2.8 times over based on original maturity and 1.4 times over based on residual maturity. The country’s external debt repayment capability stood at a slightly lower 2.7 times over based on original maturity and 1.4 times over based on residual maturity in December. The BSP defines short-term debt based on residual maturity as the sum of all outstanding short-term foreign debt based on original maturity and principal payments on medium- and long-term foreign obligations that would have to be paid within a year. For this year, the BSP expects to end the year with a $15-billion hoard. The BSP has to maintain an ample supply of dollars in its coffers to pay for the country’s import bill and service its foreign debt. Failure to stash a sufficient amount of foreign exchange would expose the peso to speculative attacks, which would only drive down the local currency and bid up domestic prices. The improvement in the level of the country’s dollar reserves comes just as the volatility in the exchange rate has narrowed to seven centavos last month from 27 centavos in January and 15 centavos in February. Central bank intervention helped prevent the further deterioration in the dollar value of the peso, according to currency traders, who blamed the local currency’s fall largely on market concern over the conduct of the upcoming presidential elections. Partly thanks to the said BSP intervention, the local currency has since risen from a historic low of P56.45 to the dollar. Government economic managers base their projections of the domestic economy’s performance this year on an exchange rate of between P54 and P56 to the dollar. < Previous | Next > | Latest News |
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