BSP boosts FX swaps to $3.35B as reserves accumulation continues

The Bangko Sentral ng Pilipinas (BSP) has ramped up its foreign exchange (FX) swaps to $3.35 billion in March, as it continues to accumulate reserves to stabilize the economy.

BSP’s FX swaps are used as a market tool to build up reserves and as a spot market exchange rate intervention.

The GIR reached $101.5 billion as of end-March, higher than end-February’s $98.21 billion.

The BSP has projected a conservative GIR for 2023 of $100 billion, which is considered as an adequate external liquidity buffer equivalent to 7.6 months’ worth of imports of goods and payments of services and primary income.

BSP Governor Felipe M. Medalla emphasized the importance of maintaining “very liquid” FX reserves as a buffer against external risks such as geopolitical tensions.

The Philippines’ GIR is composed of foreign investments, gold reserves, and other foreign assets.