Strategy aims to improve liquidity management in foreign currency, allowing BCRA to operate at a lower cost than alternatives available on the market
The Central Bank of the Republic (BCRA) announced a new US$1 billion repurchase agreement with five international financial institutions. This operation, which is a passive repurchase (REPO), will have a maturity period of two years and four months, with a fixed rate of 8.8% per year, which is made up of the SOFR reference rate and a surcharge of 4.75%. This strategy aims to improve the management of foreign currency liquidity, allowing BCRA to operate at a lower cost than alternatives available on the market. With this, the institution seeks to increase its flexibility to deal with possible imbalances in the Argentine foreign exchange market. In 2024, the BCRA had already highlighted that the increase in reserves contributed to the normalization of payments in international trade, avoiding interruptions in the production chain.
Furthermore, the Argentine central bank reported that, in an auction held on December 27, it received proposals totaling US$2.8 billion. However, it decided not to accept a higher value due to high demand, which demonstrates a scenario of significant interest from international banks. The BCRA also emphasized that this interest reinforces the trend towards normalization in access to international credit markets, which is in line with the reduction of country risk.
Published by Sarah Paula
*Report produced with the help of AI
