The Latin American Reserve Fund (FLAR) granted the Central Bank of Ecuador access to a contingency liquidity line of up to $230 million aimed at strengthening dollarization and the institution’s capacity to respond to adverse scenarios.
This contingency line is exclusively for the central bank and is part of an institutional strategy to obtain liquidity resources with recognized international organizations and entities, such as the Bank for International Settlements (BIS) and the Federal Reserve Bank of New York, which have also granted the country these contingency lines.
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In September 2021, the Bank for International Settlements approved a standby line of USD 840 million; in October 2022, the Federal Reserve Bank of New York approved a $1 billion FIMA REPO facility; and on July 21, 2023, the access of $230 million from FLAR was announced, with which the Central Bank has more than $2,000 million of liquidity funds.
The institution points out that it is achieving an important goal and believes that this reflects “the trust of international organizations and subjects in the institutional strengthening and sustainability of dollarization”, according to the press release.
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The Central Bank also refers to the fact that, according to the Organic Code of Public Planning and Finance, this type of loan does not constitute public debt.
Source: Eluniverso
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