May 8, 2020 / 10:02 PM / a month ago

Colombia central bank boosts foreign reserves by $2 billion

BOGOTA, May 8 (Reuters) - Colombia’s central bank has bought $2 billion from the Ministry of Finance to boost its foreign reserves, it said in a statement on Friday.

Following the purchase, which took place last Monday, the bank increased its international reserves to $55 billion.

The bank’s board has taken a plethora of liquidity measures meant to help the country weather the effects of COVID-19, including reducing reserve requirements for banks by more than $2 billion.

The Andean country’s economy has been battered by the double shock caused by measures meant to stem the spread of the novel coronavirus and the fall in global oil prices.

Colombia has declared a nationwide lockdown to combat COVID-19, which is set to run until May 25.

The central bank’s technical expects Latin America’s fourth-largest economy will contract between 2% and 7% this year, it said late on Monday.

In the second quarter alone, the country’s gross domestic product (GDP) will fall between 10% to 15% on a year-on-year basis, in comparison to the 2% growth likely seen in the first quarter, it added.

The bank will also carry out temporary liquidity expansion operations, known as Repos, with portfolio securities worth up to 6.3 trillion pesos ($ 1.61 billion).

The repos will have a term of six months and will provide organizations with access to credit. The first auction will be held on May 14, 2020 for 1 trillion pesos. (Reporting by Nelson Bocanegra and Oliver Griffin Editing by Alistair Bell)

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