To increase liquidity, financial institutions will be allowed to invest in inflation-indexed bonds issued in the first half of the fiscal year, the central bank said.
Inflation-indexed bonds are experiencing a surge in popularity, both from investors worried about inflation and from borrowers who think they attract a different type of buyer.
As of its last public disclosure on this score, it had a modest 16% allocation to fixed income, consisting of 7% in inflation-indexed bonds, 4% in corporates and the rest in high-yield and foreign debt.
All this for a cost that is certain to be 5 to 10 times the price of stocks and bonds for an indexed ETF, and much worse if one pays the huge price of some of the commodity partnerships being sold by the product manufacturers that have a bit of a conflict of interest on this topic.