Monthly Monetary Report

Monthly report on the evolution of the monetary base, international reserves and foreign exchange market.

Summary

• During the month of April, the monthly growth of monetary aggregates was driven by loans in pesos to the private sector and purchases of foreign currency by the Central Bank. The effect of these factors was partially offset by the contraction generated by public sector operations. In the month, the broader monetary aggregate in pesos (M3) continued to moderate its growth rate, with a year-on-year variation of 33.7%, which was 0.7 p.p. lower than that of March. In the same sense, the broader private monetary aggregate (private M3) showed an increase of 1.2% in April, accumulating an increase of 36.4% in the last twelve months, 1.6 p.p. less than in March.

• With a year-on-year variation of 44%, fixed-term placements continued to grow at historically high rates. They continued to stand out among the components of the M3, registering a monthly growth of 1.5%, with increases both in the segment of $1 million and more and in the segment of less than $1 million.

• Loans in pesos to the private sector increased their monthly growth rate compared to the previous two-month period, registering an increase of 2% ($7,180 million) in April and exhibiting a year-on-year rate of change of around 42%. In the last twelve months, commercial lines stood out for their dynamism; in particular, financing granted through documents and advances, which reached year-on-year growth rates of 62.8% and 47.4%, respectively.

• The policies to promote credit for productive activity carried out by the BCRA have favored the increase in the participation of SMEs in the total of loans in pesos. The “Line of Credit for Productive Investment” has also led to a lengthening of the term of new loans granted to SMEs and a greater participation of those granted at lower interest rates.

• The broad liquidity ratio (measured as the quotient between the sum of cash in banks, the current account of the entities in the Central Bank, the net passes with such entity and the holding of LEBAC and NOBAC and deposits in pesos) stood at 33.5%, down 0.4 p.p. compared to the previous month. By component, there was a decrease in the balance of LEBAC and NOBAC and cash in banks, while net transfers with the Central Bank increased. In April, interest rates paid by private financial institutions increased slightly. In the wholesale segment, the BADLAR rate of private banks averaged 15.1%, increasing 0.3 p.p. in the month. In the retail segment, the interest rate paid by private banks for their fixed-term deposits (up to $100,000 and up to 35 days) registered a monthly increase of 0.1 p.p., averaging 13.2%.

• Interest rates on most private sector lending lines continued to decline. Among loans with real guarantees, in April there was an increase in the share of loans corresponding to the “Credit Line for Productive Investment” and those granted within the framework of the Bicentennial Productive Financing Program, which are granted at lower rates and longer terms. The interest rate applied to secured loans averaged 19.2%, decreasing 0.5 p.p. and reaching its lowest level since August 2011. For its part, the interest rate on personal loans averaged 33.3%, falling 0.9 p.p. in the month.