Monthly Monetary Report

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

Summary

• In April, the largest monetary aggregate in pesos (M3) showed a growth of 1.1%, accumulating an expansion of 29.6% in the last year. In the month, the main factor of
expansion of monetary aggregates was the growth of loans to the private sector.

• Time deposits in pesos from the private sector were the component of M3 that showed the greatest dynamism, registering an increase of 5.5% and reaching a year-on-year variation of
32.7%. Both wholesale and retail time deposits showed significant increases, highlighting the one corresponding to operations of more than $1 million (7.1%), which was
among the highest in recent years. In the case of deposits of less than $1 million, they continued to grow firmly (3.6%), favored by the minimum interest rate scheme for individuals established by the BCRA and by the stability of the foreign exchange market.

• The liquidity ratio of the segment in national currency (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, in terms of total deposits in pesos) remained at high levels, standing at 39.7%, 1 p.p. below March.

• In April, loans in pesos to the private sector registered a growth of 2% ($11,700 million), similar to that observed in March and markedly above that of April of the previous year. The latter led to a further acceleration in the year-on-year variation, which increased by 2.8 p.p. to 24.3%. Although all lines of financing registered increases, the growth of the month was mainly explained by operations instrumented through documents, personal loans and credit card financing. It should be remembered that the last two lines continue to be favored by the maximum interest rates established by the Central Bank and by the “AHORA 12” program.

• The Central Bank expanded the implementation of the “Credit Line for Productive Investment” to generate greater benefits and deepen the promotion of credit to micro, small and medium-sized enterprises (MSMEs). Entities may apply part of the financing to the discount of public works certificates and invoices formed by MSMEs. Also, under certain conditions, they may incorporate financing disbursed as pre-financing of exports to companies that are not large exporters and new financing of imports of inputs or capital goods.

• Passive interest rates registered slight decreases, while those corresponding to financing in pesos showed mixed movements and, in most cases, limited, which did not exceed 1 p.p.. The exception was the case of the interest rate on current account advances granted to companies, for more than $10 million and up to 7 days of term, which averaged 21%, falling by about 3 p.p. in the month.

• International reserves increased by US$2,419 million in April and stood at US$33,909 million at the end of the month. The increase was associated not only with the purchases of foreign currency by the Central Bank in the foreign exchange market, but also with the income of foreign currency from a tender of national public debt in foreign currency and the increase in deposits in foreign currency of the private sector.