Primera Página – Agencia de Noticias –
Bogotá.- Banco de la República did not intervene in the exchange market in the first 11 months of 2023. This means that it did not buy or sell dollars in cash, nor through forward contracts.
This behavior consolidates the trend observed throughout 2022, in which the central bank did not buy or sell a single dollar.
It should be recalled that, in all of 2021, Banco de la República sold US$2,787.7 million in the spot market, according to the Issuer’s own figures.
This amount corresponded only to the foreign currency delivered by the Issuer to the National Government for the equivalent of the Special Drawing Rights (SDR) assigned to Colombia by the International Monetary Fund on August 23, 2021.
Through the forward contracts, the central bank sold US$181.8 million in 2021. Although it should be noted that this amount was reached in the first two months of the year: US$90.9 million in January and US$90.9 million in February. Neither in March, nor in April, nor in May, nor in June, nor in July, nor in August, nor in September, nor in October, nor in November, nor in December there were any movements.
Forward contracts, it is worth mentioning, is an instrument known as Non-Delivery Forward (NDF) and consists of the Banco de la República selling dollars for one month, at an exchange rate resulting from an auction. If, at the end of the month, the exchange rate is higher than the auction rate, Banco de la República will pay the buyer the difference. Otherwise, the buyer will pay the bank the difference.
In this way, whoever has a debt in dollars or must make a payment in dollars will be able to guarantee the price of the dollars required and reduce uncertainty. The reduced uncertainty helps to calm market participants’ fears and prevents the market from suffering excessive shocks.
