March 24, 2020 / 1:13 PM / 8 days ago

Colombia central bank could buy $2.94 bln in debt to boost liquidity

BOGOTA, March 24 (Reuters) - Colombia’s central bank could buy public and private debt of up to 12 trillion pesos ($2.94 billion), it said late on Monday, its most recent effort to shore up liquidity in financial markets that have been hit by the global coronavirus outbreak.

The bank will buy up to 10 trillion pesos ($2.45 billion) in private paper issued by banks coming due in up to three years.

The first 2 trillion pesos tranche of purchases will take place on Tuesday via auction, the bank said in a statement.

Banks, insurers, fiduciaries, brokers and investment managers will be able to participate.

The efforts will “guarantee the provision of permanent liquid resources for the economy,” said the statement, issued after an extraordinary meeting by the board.

The bank will also buy up to 2 trillion pesos of public TES bonds during what remains of March.

The measures come four days before the board is set to meet to vote on a rate decision.

Twelve of 20 analysts polled in a recent Reuters survey expect a hold to keep borrowing costs at 4.25%, which would mark 23 months at the same level, while a minority anticipate a cut to boost the economy amid fall-out from the coronavirus.

Colombia has declared a state of emergency and adopted a raft of social and economic measures to control the spread of the virus, which has killed three people and infected more than 300 in the Andean country.

$1 = 4,079.96 Colombian pesos Reporting by Nelson Bocanegra Writing by Julia Symmes Cobb; Editing by Bernadette Baum

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