Gross international reserves level drops to $74.8 billion in Oct 2018

MANILA, Philippines — The country’s foreign exchange buffer thinned to its lowest level in more than seven years at $74.8 billion in October as the Bangko Sentral ng Pilipinas (BSP) continued to smoothen the volatility in the foreign exchange market.

The gross international reserves (GIR) level last month was $166 million lower than the $74.94 billion level booked in September. This was also the lowest since hitting $71.88 billion in July 2011.

The GIR is the sum of all foreign exchange flowing into the country. It serves as buffer to ensure that the Philippines would not run out of foreign exchange that it could use to pay for imported goods and services, or maturing obligations in case of external shocks.

BSP Governor Nestor Espenilla Jr. said the month-on-month decline was due mainly to outflows arising from the payments made by the government for its foreign exchange obligations as well as its net foreign currency withdrawals.

 Espenilla said the lower buffer could also be traced to the foreign exchange operations of the central bank.