Summary
• In April, the broader aggregate in pesos (M3) registered a monthly increase of 1.7% which, as in previous months, was mainly driven by the Central Bank’s purchases of foreign currency and by the increase in loans in pesos to the private sector.
• Time deposits led the monthly increase in monetary aggregates with increases in both private sector and public sector placements. Time deposits in pesos of the private sector accumulated a monthly growth of 2.7%, which constitutes one of the highest increases in the series, when compared to the growth of the same month in previous years. The increase was verified both in deposits of less than $1 million and in those of higher amount brackets.
• The financial system’s ample liquidity in local currency (sum of cash in banks, current account deposits of entities with the Central Bank, transfers of financial institutions with this institution and holdings of LEBAC and NOBAC, over total deposits) grew by 0.9 p.p. to 38.5%. In the month, financial institutions increased their holdings of passes with the Central Bank and current account balances in this institution.
• Loans in pesos to the private sector grew 45.4% compared to April of the previous year. The growth recorded in April, 1.6% ($4,170 million) shows a gradual slowdown in the pace of credit expansion, a fact that is mainly explained by the behavior of commercial lines.
• Short-term passive interest rates paid by private entities continued the downward trend evidenced in recent months. Again, the largest decrease was verified in the wholesale segment, where the BADLAR of private banks averaged 12.2% in April, decreasing 0.7 p.p. compared to the previous month and accumulating a fall of 6.6 p.p. compared to the December average. Meanwhile, the interest rate paid by private banks for their retail fixed-term deposits (up to $100,000 and up to 35 days of term) decreased 0.5 p.p. compared to March, averaging 11.6%. In this way, it accumulates a decrease of 2.6 p.p. so far this year.
• In April, interest rates on loans to the private sector also continued to fall. The largest falls were again recorded in interest rates intended to finance commercial activities and, fundamentally, in the lines of shorter maturities. The one corresponding to current account advances for more than $10 million and up to 7 days of term, averaged 12.9% in April, decreasing 1.2 p.p. compared to March and accumulating a fall of 9.6 p.p. in the year. On the other hand, the monthly average interest rate of documents discounted to companies stood at 18.1%, decreasing 1.1 p.p. in the month and 7.5 p.p. compared to the average for December.
