Lack of Liquidity in Interbank Cause Rise of Rate

The government ordered private banks to buy bonds of Petroecuador during the first days of this week, to reduce liquidity in the market, and not to increase inflation and finance the payment of overdue obligations

This instance has generated interbank rates rise to 45% by reduced liquidity, as each bank should buy bonds equivalent to 2.12% of total deposits in domestic currency (cash, savings, time, etc..) recorded at November 15, 1991.

Petroecuador bonds have a duration of 30 days and pay a 45% annual return, which are practically the same conditions that are negotiated Stabilization Bonds Central Bank of Ecuador.