Colombia Central Bank Transfers IMF’s $2.8 Billion to Government

Colombia Central Bank Transfers IMF’s $2.8 Billion to Government

16:41 - Colombia’s central bank sold $2.79 billion in reserves and transferred the money to the central government after receiving that amount from the International Monetary Fund, Governor Leonardo Villar said Monday.

Worldwide, the IMF issued special drawing rights, or SDRs, equivalent to $650 billion to boost global liquidity, and left it to the discretion of member of nations how to use the funds. Finance Minister Jose Manuel Restrepo told lawmakers last week that the government will use the proceeds to finance the 2022 budget.

The government gave the central bank local peso bonds, or TES, in exchange for the money, Villar said, at a press conference in Bogota.

Colombia’s fiscal deficit is expected to expand this year to 8.6% of GDP from 2.5% before the pandemic and is the only major economy in Latin America in which the deficit is forecast to widen this year compared to 2020 crisis.

Elsewhere in the region, Mexico’s Finance Ministry said Aug. 29 it wants to pay down more expensive debt with the $12.2 billion its central bank received in SDRs, and is in talks with the bank on the legal steps needed to achieve that. Argentina, meanwhile, is considering using the money to repay existing debt with the Fund.

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