Colombian finance minister asks central bank to discuss liquidity of futures markets

BOGOTA, Oct. 26 (Reuters) – Colombia’s finance minister Jose Antonio Ocampo has asked the country’s central bank to discuss liquidity in futures markets at its monthly meeting next Friday, he said Wednesday, at a time when the local currency and government debt are experiencing turbulence. of domestic uncertainty.

On Monday, the Colombian peso hit a record low, depreciating 25.3% over the year amid a crisis of confidence sparked by comments by President Gustavo Petro about certain economic policies, including a proposed tax reform, the ban on new oil exploration and suggestions. for capital controls.

While the currency corrected on Wednesday, closing 1.83% at 4,884.06 against the dollar, analysts say local liquidity has declined amid global economic uncertainty.

“There is an issue that I asked the (central) bank to discuss on Friday about futures markets, about how liquid or not those futures markets are,” Ocampo told reporters.

In 2020, during the worst coronavirus pandemic, Colombia’s central bank took extraordinary measures to boost liquidity, such as currency hedging through auctions for the sale of dollars through forward transactions, or “swaps.”

Ocampo, who sits on the bank’s seven-member board, rules out direct intervention in the foreign exchange market by selling dollars from international reserves to stem the depreciation of the peso, as Chile recently did.

In a recent Reuters poll, 12 out of 14 analysts predict the central bank will raise its benchmark rate by 100 basis points to 11% on Friday. One of the analysts predicted an increase of 75 basis points and another forecast an increase of 50 basis points.

Reporting by Carlos Vargas and Nelson Bocanegra; Writing by Oliver Griffin; Editing by Chris Reese

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