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Colombia central bank relaxes foreign exchange regulation

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Colombia central bank relaxes foreign exchange regulation

Colombia's central bank, Banco de la República, has set new exchange rules, including the removal of an obligation for citizens to report foreign assets and operations to the regulator, according to a May 25 statement.

Under the new rules, such information is only to be reported to the country's tax authorities. The regulator also modified a cap for cash exchange transactions to $10,000 from $3,000 previously, El Colombiano reported.

The central bank said the new rules are meant to make exchange operations flexible and efficient, minimize risks and preserve "the non-dollarization principle of the economy, financial stability and the effectiveness and autonomy of monetary policy."

Separately, Banco de la República also announced that the International Monetary Fund approved a two-year flexible credit line for Colombia in an amount equivalent to about $11.4 billion, while canceling its previous financing arrangement with the country.

Juan José Echavarría, the governor of the central bank, said the loan reflected a recognition from the IMF that the country's macro policy is
"well-managed" and was "especially relevant" at the moment due to the recent struggles of Argentina and other emerging economies on currency markets, according to the El Colombiano report.