2017.09.2115:57:00UTC+00CHILE: Central Bank Revokes ALADI's Credit Line To Venezuela

The Chilean central bank decided to revoke a bilateral credit line granted to the Central Bank of Venezuela (BCV) under the Agreement on Reciprocal Payments and Credits of the Latin American Integration Association (ALADI). The decision was made due to successive breaches by the Venezuelan monetary authority in the installments due during 2017.

"The progressive deterioration of the financial indicators of Venezuela and the behavior of the BCV in previous years within the framework of this agreement had already motivated the adoption of other measures of a general nature to protect the assets of the central bank of Chile," said the Chilean monetary authority.

In addition to communicating the revocation to the BCV, the Chilean central bank sent a copy to the ALADI.

"The Article 27 expressly and specifically empowers any central bank that is a member of the ALADI Convention to unilaterally revoke the credit line granted to another central bank under its umbrella," he explained.

The central bank of Chile is a member of ALADI's Agreement of Reciprocal Payments and Credits, signed by 11 other central banks in the region.