Colombia’s finance minister requests that the central bank discuss futures market liquidity By Stocksak

© Stocksak. FILE PHOTO – Jose Antonio Ocampo, Colombia’s Finance Minister, speaks with Stocksak during an interview in Bogota on August 2, 2022. REUTERS/Vannessa Jimenez

BOGOTA (Stocksak). The Colombian Finance Minister Jose Antonio Ocampo requested that the central bank discuss liquidity in futures market in its monthly meeting on Friday. He stated this Wednesday, at a moment when local currency and public debt are under pressure from domestic uncertainty.

Monday saw record lows in the Colombian peso. It had fallen 25.3% over the past year due to a crisis of faith triggered by comments made by President Gustavo Petro about certain economic policies. These included a proposed tax reform and the prohibition of new exploration.

Analysts believe that the global economic uncertainty has caused local liquidity to drop, despite a slight correction in the currency’s value at 4,884.06 versus USD.

Ocampo stated to reporters that there was a topic I asked the central bank to discuss with me on Friday regarding futures markets. It concerns how liquid or non-liquid these futures markets are.

In 2020, Colombia’s central banks took extraordinary measures in order to boost liquidity. They used auctions to sell dollars through forward operations.

Ocampo, who is a member of the bank’s seven-member board ruled out direct intervention in the foreign currency market by selling dollars from international reserve to contain the depreciation, as Chile did recently.

A recent Stocksak poll revealed that 12 of 14 analysts predicted that the central bank would raise its benchmark rate by 100 basis points to 11 percent on Friday. One analyst predicted a 75 basis point hike, while another saw a 50 basis point increase.

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