translated from Spanish: Central bank added new measures after dollar rise

The board of the Central Bank of Chile reported on Thursday that it will add new measures complementary to those of yesterday following the escalation of the dollar price in the country today closed by more than $800.Through a statement, he reported that “the adjust is to increase the effectiveness of operations advertised in local and foreign currency, to facilitate liquidity management of the local financial system.” The first step is to suspend the issuance of Desperating Bank (PDBC) Promissory Notes for the remaining lacing period ending on 8 December. The second measure consists in extending the frequency and term of REPO operations – papaeles that are used to manage liquidity in pesos-, both in its garment and traditional mode, adding the period of 90 days to the 30 days informed yesterday.As a third measure will be the incorporation of deposits and bank bonds as guarantees in the REPO operations, Permanent Liquidity Facility and Inintraday Liquidity Facility, both in its traditional garment modality. The fourth measure is to increase the auction frequency of swap buy trades, maintaining the deadlines and the total amount announced yesterday. And finally, the fifth step that the board took was to offer a central bank bond repurchase program for all operators of the SOMA system, which will be implemented in the window mode. The issuing body stated that “the provision of liquidity through these measures is necessary because in a scenario of uncertainty such as the current one there are portfolio adjustments of some agents. As liquidity constraints occur, such adjustment would lead to higher-than-usual volatility and friction, with the risk of affecting the cost of financing for individuals and small businesses.” Finally, he added that “with this objective, and after observing market behaviour, the BCCh is now expanding the range of measures to enhance their effectiveness. For this purpose, the frequency of announced transactions is being increased, offering a repurchase program and accepting other guarantees in its financing operations, among other measures”

Original source in Spanish