Colombia’s central bank approves purchase of $2 billion from the government — The Rio Times

Colombia’s central bank, Banco de la República, has approved the direct purchase of $2 billion from the national government. The operation will be carried out through the Treasury unit of the Ministry of Finance by the end of 2026 at the market exchange rate on the day of the transaction, The Rio Times reports.

Replenishing international reserves

The purchased dollars are to be included in Colombia’s international reserves. The central bank explained the decision by the government’s availability of currency for sale and high international uncertainty, including high global interest rates and tight financial conditions.

At the official TRM exchange rate of 3,166.91 Colombian pesos per US dollar as of October 30, $2 billion amounted to approximately 6.3 trillion pesos. At the same time, the final amount in the national currency will depend on the exchange rate on the day of the operation.

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A second channel for currency purchases

The new agreement supplements a reserve accumulation program of up to $4 billion, which Banco de la República announced on July 31. The program provides for monthly put-option auctions: their winners may sell dollars to the central bank when the official exchange rate is below its moving average.

The central bank said it had taken into account the operation’s impact on peso liquidity. Since the institution will pay the Treasury in pesos, this will increase the amount of national currency in the banking system. The regulator plans to use offsetting measures to ensure that short-term rates remain at the policy rate.

On the same day, Banco de la República’s board, by a majority of four votes to three, left the policy rate unchanged at 12.25%. According to the central bank, annual inflation stood at 6.3% in September, while analysts expected it to accelerate to 6.9% in December.