CIRCULAR No. 0017-2020-BCRP was published last April 15, by which the Central Reserve Bank of Peru (BCRP) approved to include in its monetary policy instruments to the Secured Credits Reporting Operations of the National Government Represented in Securities (“Repos”) to regulate their characteristics, as well as the mechanisms and schemes through which these operations will be carried out.
The aforementioned circular is issued within the framework of the Reactive Peru Program (“Program”) approved by Legislative Decree No. 1455 (amended by Legislative Decree No. 1457), whose Operating Regulations were recently approved by Ministerial Resolution No. 134-2020-EF/15. This means that the operations to be carried out by the companies of the financial system (ESF) with the BCRP referred to in the Reactiva Peru Program will be carried out by holding these Repos, by virtue of which the ESF will sell securities representative of credits guaranteed by the National Government to the BCRP, receiving in exchange national currency and committing in the same act to repurchase said securities at a later date against the payment of national currency, on the basis of the Repos Framework Agreement and the respective Specific Agreements that the ESF must sign with the BCRP.
According to the circular, the BCRP will be able to carry out the Repos with the ESF through auctions or direct operations with both mechanisms defining the maximum interest rate that the ESF will be able to apply to the credits they grant within the Program. On the other hand, the possible schemes for carrying out the Repos are: (i) the Regular, in which the BCRP temporarily buys secured loan portfolios from the National Government to the ESF; and, (ii) the Special, in which the BCRP temporarily buys participation certificates with guarantee that are issued from securitization trusts on credit rights from secured credits from the National Government granted by the ESF. These schemes are based on the two alternatives provided for in the Program for the granting of the guarantee of the National Government.
