Salvadoran Banks Request Release of $261 million

The Salvadoran Bank Association will request the SSF to release the $261 million imposed due to the elections.

Thursday, March 19, 2009

In late 2008, the Financial System Superintendent (SSF) ordered a 3% increase in liquidity reserves which were at 25% for the protection of deposits if there was a bank run. This increase represented $261 million for the banks which will request for the money to be released as soon as possible.

Armando Arias, president of the Salvadoran Banking Association, told in relation to the possible bank runs that “we have not seen anything like that so far. I can talk about macro issues because we analyzed the big figures and I would say that the movement of deposits is normal."

More on this topic

Excess Liquidity in El Salvador

September 2009

The liquidity indicator was 39.8% in July 2009, according to data from the Salvadoran Banking Association.

The legal lowest acceptable level, set by the Central Bank of El Salvador (BCR), is 17%.

"Victor Ramírez, superintendent of the financial system, stated that excess liquidity is due to many sectors not accessing credit", reported "Banks are currently assessing the level of risk in the country".

$145 Million Freed to Banks in El Salvador

April 2009

With the backing of the Financial System Superintendent, the Central Reserve Bank began to release half of the additional reserve of $290 million.

Due to the celebration of the recent presidential elections, an additional reserve of 3% had been established, with the anticipation of money withdrawals and capital flight.

$290 Million to be Returned to Salvadoran Banking

March 2009

Banks in El Salvador will receive $290 million that where frozen as a liquidity reserve.

The Salvadoran Central Reserve Bank (BCR) had implemented a liquidity reserve of 3% of all deposits as protection against capital flight during the last presidential election.

According to what Daniel Choto wrote in, the BCR will begin returning the money gradually, freeing $58 million every fourteen days, in 5 installments.

$500 million for Salvadoran financial sector

November 2008

In an unprecedented move since the dollarization of the country's economy, the BCR will inject ready money into the local financial sector.

The IDB approved an operation for the Central Reserve Bank to buy a credit portfolio totalling $500 million from banks giving them more liquidity to support the production sector.

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