Oct 9, 2008
No mas dolares por favor!!!
Today Banco Central de Chile announced that the Bank Reserve Requirements for operations in foreign currency no longer have to be in US dollars as it was before, and now can also be in Euros, Yens or Pesos. I'm posting because I'm not too sure why they are doing that now. My bet is this is a creative strategy to provide some liquidity to the system in an environment of external contraction but also high inflation pressures that limit the ability to use interest rate... any other ideas?... Is this another sign of the decadence of the dollar as dominant currency?
Posted by Dany Jaimovich - Bakary Baludin at 8:50 PM