Ocampo Gaviria, Jose A., and Tovar Mora, Camilo E., “Capital Flows, Savings and Investment in Colombia 1990-96,” 1997, Archivos de Macroeconomía 58, DNP.
Sánchez, F., Murcia G. and Oliva C., “Auge y Colapso del Ahorro Empresarial en Colombia, 1983-1994,” Planeación y Desarrollo, 1996.
Prepared by Keiko Honjo.
This occurred because of the excess in cost per sterilization bond issued over earnings on international reserves.
Some studies have raised doubts about the relevance of discussing the issue of short versus long-term flows. The argument against the short-term flows is based on the assumption that the long-term capital inflows would be more stable because they are mainly guided by longer term fundamentals and hence less sensitive to short-term interest rate differentials. In fact, if capital markets are sufficiently developed, allowing relatively easy transactions of the long-term flows, the long-term capital could be as liquid as the short-term flows. In the case of the United States, for example, there is no classification of flows between short and long.
There have been several cases in the past in which the deposit requirement was circumvented through establishment of a holding company in a tax-heaven country abroad. The external borrowing by such holding companies and their transfers of funds to Colombian domestic companies would be legally recorded as foreign direct investment, exempt from the deposit requirement.