Changes in the net external asset position of euro area MFIs reflects monetary exchanges with the rest of the world, the dynamics of which has been driven in recent years by the net portfolio outflows that I have described, as can be seen in the monetary presentation of the balance of payments. By construction, this perspective abstracts from the banking sector’s autonomous actions.
At this level, the GIR is equivalent to 6.0 months’ worth of import cover and 2.9 times short-term external debt based on residual maturity. The external debt ratio has also improved. With the build-up in the GIR, the BSP, together with the National Government as well as private corporations, were able to prepay some obligations.