The country’s foreign reserves fell to a 15-month low as the Bangko Sentral ng Pilipinas (BSP) battled a weakening local currency.

Preliminary data released by the BSP on Thursday evening showed gross international reserves (GIR) declined to $104.9 billion at end-April from $107.5 billion in March.

The central bank uses GIRs, in part, to manage volatility in the foreign exchange market. It previously attributed the March decline partly to foreign exchange intervention as the peso slid to record lows amid the Middle East conflict.

Forex holdings drop

In April, BSP data showed foreign exchange holdings dropped to $464.9 million from $1.746 billion in March, reflecting a 73.37 percent decline. This may indicate that the bank intervened as the peso weakened to record levels against the US dollar, breaching the P61 mark and hitting a trough of P61.56 toward the end of April.

Gold reserves also declined, falling to $19.779 billion from $20.1766 billion.

Despite the decline, the reserve level remains sufficient to cover almost 7 months’ worth of imports of goods and payments of services and primary income, remaining above the international benchmark considered adequate for external liquidity protection.

The latest GIR data came after the BSP reported that the country’s balance of payments (BoP) deficit widened to $2.6 billion in March, bringing the first-quarter shortfall to $5.3 billion.

Outflows

The BSP earlier said the March BoP deficit reflected outflows arising mainly from the national government’s foreign currency withdrawals from its deposits with the central bank to service external debt obligations, as well as the BSP’s net foreign exchange operations.

Also flagged by the central bank was the peso’s depreciation — which has weakened by about 7 percent since the end-February close of P57.66 — as a factor behind inflation in April, which surged to 7.2 percent amid the first- and second-round effects of the energy crisis.