Summary
In March, the BCRA’s Monetary Policy Committee decided to extend the 0% growth target of the monetary base (WB) until December. Therefore, it set the WB’s monthly average target at the level it reached in February: $1.343 billion (net of the expansion due to foreign exchange purchases and the seasonal increase in December). In April, the WB’s monthly average reached $1.325 billion, so the BCRA once again exceeded its target, this time by $18 billion (1.4%).
The average rate of LELIQ increased 5.8 p.p. between the end of March and April, standing at 73.9% at the end of this last month. Interest rates on term deposits continued to partially replicate the increase in monetary policy. For example, the TM20 of private banks ended the month at 55%, 6.1 p.p. above its value at the end of March.
To promote the most effective transfer of the variations in the BCRA’s reference rate to the yields received by depositors, effective as of May, the BCRA made it possible for financial institutions to take deposits from customers without a prior contractual relationship.
Fixed-term deposits in pesos of the private sector increased 1.3% ($14.5 billion) in April and 1.8% when considering the seasonally adjusted balance. Thus, they accumulated a growth of 71% in the last 12 months.
The seasonally adjusted balance of loans in pesos to the private sector decreased 0.2% in April, with a lower dynamism of credit card financing compared to previous months. On the other hand, loans granted through documents grew again. In this segment, those destined for SMEs with subsidized interest rates are being disbursed.
To reinforce the contractionary bias of its monetary policy and in the face of the increase in exchange rate volatility, at the end of April, the BCRA announced that it will be able to sell foreign currency even when the exchange rate is within what it had previously defined as a non-intervention zone. It also increased from US$150 to US$250 million the amount of the daily sale stipulated above that range. In April, the BCRA did not carry out operations in the spot exchange market.
The balance of international reserves ended April at US$71,662 million, US$5,475 million above the level at the end of March. This increase was explained by the disbursement of the fourth tranche of the stand-by program agreed with the IMF, which was partially offset by payment of debt in foreign currency of the National Treasury.
