Central Bank of Chile will expand international reserves to strengthen liquidity

Central Bank of Chile will expand international reserves to strengthen liquidity

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SANTIAGO, Jan 13 (Reuters) – The Central Bank of Chile announced on Wednesday a plan to buy dollars for 12,000 million dollars to replenish and expand the country’s international reserves, to strengthen liquidity with a view to the termination of a credit line flexible with the International Monetary Fund (IMF).

As a preventive measure against the impact of the coronavirus pandemic, the organization signed last May the 24-month agreement with the IMF for 24,000 million dollars that would allow it to face eventual turbulence.

“The Council considers it prudent to start a process now that allows it to replace the role of the FCL (flexible credit line) through the gradual accumulation of international reserves,” it said in a statement.

 

“Starting next week, the Central Bank will implement a gradual program for the purchase of foreign currency for 12,000 million dollars. Of these, 2,550 million correspond to the replacement of the reserves used in the intervention plan that was executed between December 2019 and January 2020, “he explained.

 

The remaining balance corresponds to the amount necessary for the reserves to represent 18% of the Gross Domestic Product (GDP). (Report by Fabián Andrés Cambero)

 

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