Banco de la República Will Manage the Bank Reference Indicator (BRI)

At a meeting on April 30, the Board of Directors agreed to manage the bank reference indicator (BRI), as requested by the Colombian Banking Association (Asobancaria). The design of this indicator reflects the reference interest rate representative of liquidity conditions on the money market.

The BRI is a private-sector initiative. It is being supported by Banco de la República as an integral part of efforts to develop the money market in Colombia and to strengthen the mechanisms for monetary policy pass-through.

It was designed by a work group that includes Asobancaria, several banks representing the members of Asobancaria, the Superintendent of Financial Institutions, the Ministry of Credit and Public Finance, and Banco de la República.

By providing the financial system and the general economy with a reference on short-term liquidity conditions, the BRI will bolster development of both the money market and the market for financial derivatives. Derivatives are an important tool for hedging against the risks confronting agents in the Colombian economy.

Banco de la República is scheduled to begin publishing the BRI in the second half of 2007.