* Chile’s central bank (BCCh) has announced a gradual programme to reposition and expand foreign currency reserves to around 18% of GDP, in order to strengthen the country’s international liquidity position. A BCCh statement highlighted that a 24-month Flexible Credit Line (FCL) worth US$24bn from the International Monetary Fund (IMF) was agreed in May 2020, to address the impact of the coronavirus (Covid-19) pandemic. However, this is set to expire in May 2022, and so the BCCh considers it “
prudent” to begin shoring up foreign exchange reserves in order to strengthen liquidity. As of next week, the BCCh will begin implementing a plan to gradually purchase US$12bn in foreign currency, through daily purchases of US$40m at competitive rates.
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