Colombia's central bank injected some 9 billion pesos of permanent liquidity into the economy by lowering its reserve requirement on various banking products to stimulate lending.
The Central Bank of Colombia (CBC), which cut its rate last month for the first time in almost two years, said its board of directors at an extraordinary meeting also authorized the purchase of treasury bonds, known as TES, in the secondary market for up to 2 billion pesos for the remainder of April.
On March 27, when CBC cut its benchmark rate by 50 basis points to 3.75 percent, the board decided to buy up to 2 billion of treasury bonds during the rest of March.
The board also authorized the central bank to intervene in the TES forward market to cover against the risk of any "strong" impairment of TES market participants, helping stabilize the market.
CBC added it would announce any such intervention in a timely manner.
The reserve requirement on banks' checking and savings accounts will be cut 300 basis points to 8.0 percent while the requirement on fixed term savings of less than 18 months will be cut by 100 points to 3.5 percent.
www.CentralBankNews.info
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