Peso appreciates on record-high foreign reserves

The Philippine peso appreciated against the US dollar on Friday as investors cheered news that the country’s foreign currency reserves reached another record-high.

The local currency gained 11.5 centavos to close at P48.395 from Thursday’s finish at 48.51.

This is the strongest for the peso in nearly four years or since November 3, 2016, when it closed at P48.34:$1.

“Peso again stronger after GIR (gross international reserves) reached a new record-high that provide greater support/cushion/buffer for the local currency, with high import cover of nine months, more than twice the minimum acceptable international standard of three to four months,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said.

The country’s GIR - a measure of a country’s ability to settle import payments and service foreign debt - reached $98.95 billion in August, up by $350 million from $98.6 billion in July.

“The peso appreciated for the second straight week, stronger for the 13th week in 14 weeks, by 0.145 or 0.3%,” Ricafort said.

“Since the start of 2020, the peso already appreciated by P2.24 or 4.4%,” he said. -MDM, GMA News