March 19, 2020
Investment
Official Information

The Treasury Ministry amends the mechanism for selling US dollars to provide more information regarding the Treasury’s participation in the local market

The Treasury Ministry amends the mechanism for selling US dollars to provide more information regarding the Treasury’s participation in the local market
The Public Finance Report for the fourth quarter of 2019 forecast the Central Government’s financing requirements for 2020 at US$17,536 million, which will be financed by issuing Treasury bonds and selling Public Treasury financial instruments.

The mechanism for selling US dollars will be amended with effect from April, in order to provide the market with better information about the Treasury’s participation in the local foreign exchange market. According to forecasts in the Public Finance Report, the Treasury Ministry expects to sell up to US$9.4 billion (*) during 2020, of which around US$2.6 billion has already been sold to date.

Foreign currencies will be auctioned by the Treasury using a commonly used system in the foreign exchange market. The amount that be auctioned to meet the Treasury's financing requirements will be published every month, together with a maximum weekly amount. Therefore, an amount of up to US$500 million per week may be auctioned during April.

Details of the auction procedure will be published over the coming weeks.

The results of each auction will be promptly published on the websites of the Treasury Ministry and the Budget Office. These amounts and modalities may be subject to change if there are significant changes in market conditions or in the Government’s finance requirements. If this happens, the market will be informed in good time.

 (*) The Treasury Ministry’s annual forecast of foreign currency sales of US$9.4 billion during 2020 is consistent with the Employment Protection and Economic Recovery Plan announced on Monday, December 2, 2019. On that occasion, it was reported that the Central Government's forecast for foreign currency sales in 2020 was US$11 billion. The difference between these two amounts is mainly due to foreign debt repayments during the period of US$1.13 billion, capitalizations, and other minor adjustments in forecasted finance requirements.