Wednesday, September 3, 2014

Central Bank orders reduction of banks' dollar holdings

The Central Bank (BCRA) has decreed a reduction in foreign currency possession to banks, lowering holdings from 30 to 20 percent of total holdings, forcing financial entities to sell the assets with the purpose of increasing market supply and relieving pressure on the black market.

The announcement was issued by the BCRA under an official communiqué numbered “A 5627”, which states “no financial entity can have over 20% foreign currency in its patrimony”.

The measure applies both to liquid currency and US dollar assets.