The dollar rose 15 pesos this Wednesday after the Central Bank announced that it will start a reserve accumulation program for 12 billion dollars for a period of 15 months.
Taking into account that the flexible credit line (FCL) that the body obtained in May last year from the International Monetary Fund expires in May 2022, and that “the prevailing international financial conditions are appropriate, the Council considers it prudent to start now a process that allows to fulfill the role of the FCL through the gradual accumulation of international reserves“, explained the institution in a statement.
Of the 12 billion to be acquired, 2,550 correspond to “replacement of the reserves used in the intervention plan that was executed between December 2019 and January 2020, and the remaining balance to the amount necessary to raise its size to around 18 percent of GDP. “
🔵Now: the Central Bank announces that it will buy 12 billion dollars to strengthen its international reserves.
– Felipe Gallegos (@ FelipeGallegos7) January 13, 2021
“This program will materialize in a period of 15 months, in order to coincide with the end of the FCL, through regular currency purchases for 40 million daily through competitive auctions “, details the Central Bank.
The body also argues that “this measure is congruent with the general scheme of monetary policy, based on an inflation target and exchange rate flexibility, as well as its current instance, since it does not seek to modify the prevailing financial conditions. For this reason, the monetary effects of this measure will be sterilized in amounts consistent with the orientation of monetary policy. “
Due to this announcement, the value of the dollar jumped 15 pesos this Wednesday, the fifth consecutive rise in the currency, which closed at 740 pesos.