diff --git a/src/DynareBison.yy b/src/DynareBison.yy
index 7899319bffa0e3843c306425095b690a996b9896..0364b3c0bdd9faee4f0a13a52053fc663fc8b2d7 100644
--- a/src/DynareBison.yy
+++ b/src/DynareBison.yy
@@ -151,7 +151,7 @@ class ParsingDriver;
 %token <string> ALPHA BETA ABAND NINV CMS NCMS CNUM GAMMA INV_GAMMA INV_GAMMA1 INV_GAMMA2 NORMAL UNIFORM EPS PDF FIG DR NONE PRIOR PRIOR_VARIANCE HESSIAN IDENTITY_MATRIX DIRICHLET DIAGONAL OPTIMAL
 %token GSIG2_LMDM Q_DIAG FLAT_PRIOR NCSK NSTD WEIBULL WEIBULL_PDF GMM SMM
 %token INDXPARR INDXOVR INDXAP APBAND INDXIMF INDXFORE FOREBAND INDXGFOREHAT INDXGIMFHAT
-%token INDXESTIMA INDXGDLS EQ_MS FILTER_COVARIANCE FILTER_DECOMPOSITION SMOOTHED_STATE_UNCERTAINTY SMOOTHER_REDUX
+%token INDXESTIMA INDXGDLS EQ_MS FILTER_COVARIANCE UPDATED_COVARIANCE FILTER_DECOMPOSITION SMOOTHED_STATE_UNCERTAINTY SMOOTHER_REDUX
 %token EQ_CMS TLINDX TLNUMBER RESTRICTIONS POSTERIOR_SAMPLER_OPTIONS
 %token OUTPUT_FILE_TAG HORIZON
 %token SBVAR TREND_VAR DEFLATOR GROWTH_FACTOR MS_IRF MS_VARIANCE_DECOMPOSITION GROWTH
@@ -2126,6 +2126,7 @@ estimation_options : o_datafile
                    | o_aim_solver
                    | o_partial_information
                    | o_filter_covariance
+                   | o_updated_covariance
                    | o_filter_decomposition
                    | o_smoothed_state_uncertainty
                    | o_smoother_redux
@@ -3185,6 +3186,7 @@ calib_smoother_option : o_filtered_vars
                       | o_loglinear
                       | o_first_obs
                       | o_filter_covariance
+                      | o_updated_covariance
                       | o_filter_decomposition
                       | o_diffuse_kalman_tol
                       | o_diffuse_filter
@@ -3875,6 +3877,9 @@ o_second_deriv_provided : SECOND_DERIV_PROVIDED EQUAL namespace_qualified_filena
 o_filter_covariance : FILTER_COVARIANCE
                         { driver.option_num("filter_covariance","true");}
                       ;
+o_updated_covariance : UPDATED_COVARIANCE
+                        { driver.option_num("updated_covariance","true");}
+
 o_filter_decomposition : FILTER_DECOMPOSITION
                            { driver.option_num("filter_decomposition","true");}
                          ;
diff --git a/src/DynareFlex.ll b/src/DynareFlex.ll
index 7984e06055c99e2a25964db8cfdac65c3268bb71..4778629ae314a6cd6e843880acaaaaf221c76858 100644
--- a/src/DynareFlex.ll
+++ b/src/DynareFlex.ll
@@ -667,6 +667,7 @@ DATE -?[0-9]+([ya]|m([1-9]|1[0-2])|q[1-4])
 <DYNARE_STATEMENT>mle_mode {return token::MLE_MODE; }
 <DYNARE_STATEMENT>k_order_solver {return token::K_ORDER_SOLVER; }
 <DYNARE_STATEMENT>filter_covariance {return token::FILTER_COVARIANCE; }
+<DYNARE_STATEMENT>updated_covariance {return token::UPDATED_COVARIANCE; }
 <DYNARE_STATEMENT>filter_decomposition {return token::FILTER_DECOMPOSITION; }
 <DYNARE_STATEMENT>smoothed_state_uncertainty {return token::SMOOTHED_STATE_UNCERTAINTY; }
 <DYNARE_STATEMENT>smoother_redux {return token::SMOOTHER_REDUX; }