The Philippines' foreign exchange reserves fell to their lowest level in nearly two years in July, as the central bank intervened heavily to support the local currency amid renewed market volatility.
The Bangko Sentral de Pilipinas (BSP) deployed significant dollar liquidity to counter downward pressure on the peso, resulting in a notable drawdown of its international reserves.
The intervention comes as the peso has weakened sharply, closing at P61.71 per US dollar on Tuesday — its weakest level in recent memory.
The currency shed 11.1 centavos from the previous session’s close of P61.599, reflecting a sudden surge in selling pressure.
This depreciation trend has forced the BSP to choose between defending the exchange rate and preserving its buffer against external shocks.
Market participants are closely watching the upcoming release of July inflation data, scheduled for next week, for signals on the central bank’s next policy move.