ColombiaFinance and Banking
Resolution 05 of 1997 modifying the Colombian Foreign Exchange Regime contained in Resolution 21 of 1993, as amended, was adopted on May 19, 1997, by the Board of Directors of the Central Bank ("Resolution 05") . The Central Bank mentioned as objectives for this Resolution the increase of the cost of foreign currency loans to Colombian residents, the discouragement of inflows of foreign capital and avoidance of the revaluation of the Colombian peso. Among the most relevant amendments introduced by the mentioned Resolution are :
1. Effective as of the 20th of May of the current year, drawdowns of all foreign credits not registered with the Central Bank prior to such date will be subject and conditioned to a cash reserve or deposit with the Central Bank equivalent to 30% of the value of the drawdown. Such deposit shall be made for a period of eighteen (18) months, but may be totally or partially redeemed in advance, at a discount determined by the Central Bank. The deposit shall be
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