by Allison Barbosa, Global Liquidity Solutions, Bank of America Merrill Lynch
The diverse regulatory environment in Latin America can make efficient cash and liquidity management challenging. However, as Allison Barbosa discusses here, some recent regulatory relaxation combined with a pragmatic ground up approach has opened up the opportunities available.
From large multinationals to local companies, corporates across the board have traditionally regarded Latin America as a region where effective cash and liquidity management is something of a challenge. While regulatory restrictions are frequently cited as the main reason for this, other factors, such as the challenges associated with current infrastructure in remote areas, have also played a part. However, the liquidity environment in Latin America has been gradually evolving in recent years, opening up new possibilities for corporate treasurers looking to optimise their liquidity in the region.
Centralising liquidity management has long been an ambition for many global organisations, and events since 2008 have forced companies to focus on this area even more closely. As the availability of external liquidity sources (such as bank debt) has declined and the cost of funding has increased, corporations have increasingly seen the value of maximising their internal liquidity sources by adopting a centralised approach to liquidity management.