LatinNews Daily - 14 January 2021

In brief: Chile announces plan to bolster foreign exchange reserves

* 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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