Monthly Monetary Report

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

• In April, the private M3 broad aggregate, which includes means of payment and time deposits, in seasonally adjusted terms reached the highest monthly variation since the exit from convertibility, both
  in nominal and real terms. Within the Private M3, the means of payment drove their increase, especially in April, demand deposits. When observing the daily evolution since
  March 19, it can be seen that the strong average increase in April largely comes from the statistical carryover of March, since the growth occurred mainly after the beginning of the period of preventive and mandatory social isolation
  . 50% of the increase in means of payment was observed in the last week
  of March.
• The behavior of monetary aggregates was influenced by the measures that the National Government has been adopting
  in the face of the health emergency. Among them, the collection of the extraordinary subsidy to beneficiaries of social allowances and retirees and the Emergency Family Income was effective.
  These payments implied cash withdrawals from banks, which added to the high demand for transactional money for precautionary reasons, led to the working capital held by the public
  growing 8.5% in real terms and without seasonality, and demand deposits registering an average monthly increase
  of 15.5%.
• After showing a downward trend from the beginning of the quarantine on March 20 until April 13
  – when banks returned to serving the public through a shift system – time deposits
  in pesos in the private sector began to grow, while immobilized balances began to fall. Thus, term placements almost entirely reversed the fall observed prior to
  the reopening of banks. In any case, the average monthly balance registered a nominal fall of 3.3%. On the other hand, pre-cancelable UVA deposits significantly accelerated their pace of expansion, ending April with a balance of $18,000 million, practically double that observed in the middle of the month.
• The Board of Directors of the BCRA decided to raise, as of April 24, the rate with which it remunerates 1-day passive
  passes by 3.8 p.p. to 15.2% n.a. Additionally, it set a minimum interest rate – equivalent to 70% of the
  monetary policy rate – for time deposits of individuals of up to $1 million effective April 20. In addition, on the last day of
  the month it provided that as of May the minimum interest rate will cover deposits of individuals of up to $4 million.
• Loans in pesos to the private sector, in nominal terms and without seasonality, registered a
  6.9% monthly expansion in April (3.7% in real terms), driven by commercial financing. These growth rates are around the highest levels reached since 2002. With regard
  to loans granted to MSMEs and health service providers at a maximum interest
  rate of 24% n.a., the accumulated disbursements at the end of April amount to $140,600 million. Approximately half of this amount was allocated to the financing of working capital (excluding
  payment of salaries).