Chile's central bank to buy a small but steady drip-feed of US dollars over next 3 years

Chile central bank says objective is to change the composition of the bank’s international liquidity sources, increasing the proportion of its own reserves

• Measure is part of a financial management strategy that aims to gradually replace part of the current credit lines in foreign currency with its own international reserves
• Program will be activated on August 8
• Expects to accumulate approximately US$18.5 billion over the three-year period
• Measure will be reviewed every six months, although it may be adjusted if significant changes in market conditions are observed, which will be communicated in a timely manner
• To avoid impacts on liquidity in pesos, operations will be sterilized through the issuance of central bank discountable promissory notes (PDBC), in line with the monetary policy orientation
• Measure is consistent with the inflation targeting and floating exchange-rate regime
• Program seeks to strengthen the management of international reserves as part of the bank’s ongoing functions to safeguard financial stability

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Look, buying 25mn USD each day is not going to be a game changer for FX rates.

However, if you are unfamiliar with the idea of 'other time frame' market participants this might be a good prompt to check it out. I first came into contact with idea through market profile a few bazillion years ago.

• Jim Dalton's Mind Over Markets is a great book
• Steidlmayer On Markets too

This article was written by Eamonn Sheridan at investinglive.com.

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