Treasury & FX in Colombia & Peru

Report date: 
25 Nov 2021


It is a rare pleasure to have a call on Latin America where the conclusion is that things work well, but that is the case with these two countries. This is even better news, given the turbulent pasts both countries have.

Of course, our Latin American treasurers always enjoy a lively discussion, and this session was no exception. It is still Latin America, so things will never be 100% plain sailing. 

Generally, funding is no problem. Extensive use is made of intercompany loans, and currency hedging is only complicated by the bouts of volatility. One participant has also encountered issues with the value dating of hedges.

The relationships with local banks are strong, and there is often resistance to centralising banking relationships. This usually results in a mix of local and international banks – the local banks are viewed as being necessary, anyway.

As this is Latin America, taxes and the bureaucracy can be onerous. In Colombia, people tend to use trustees to get round a financial transaction tax – the same tax exists in ...please sign in to continue reading

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