Executive summary
In a more favorable international context, the Argentine economy grew 0.9% year-on-year in the first quarter of 2000, driven by the good performance of exports.
The capital market developed in an environment of volatility and high volume of operations. Country risk showed fluctuations but, on average, it was 70 basis points lower than the average of the previous quarter. The National Government managed to make a significant number of placements in the domestic and international markets, practically covering the financing needs of the first half of the year.
The monetary variables showed a slower evolution than that observed in the same period in previous years, and although there was an increase in deposits and a fall in interest rates throughout the quarter, both phenomena were closely linked to the reversal of the behavior of last December, associated with the “year 2000 effect”.
As for the financial system, the funds raised were used to increase the holding of liquid assets and loans to the public sector. Profitability showed a significant improvement, especially in private banks, reflecting the effects of higher net income on assets and lower administrative expenses and charges for uncollectibility, while the main solvency indicators showed a slight increase in the period, reaffirming their relatively high levels in an international comparison.
