Monthly Monetary Report

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

Summary

• In August, the broader monetary aggregate in pesos (M3) increased 2.6%. This increase was similar to that observed in July and close to that of August 2012. As a result, the year-on-year rate of change of M3 remained stable at around 29.4%. Among the components of private M3, fixed-term placements exhibited a monthly growth of 4.6%, gaining share within the aggregate, reaching a weight of close to 31% in August. Thus, the year-on-year growth rate of private sector time deposits continued to be at historically high levels, reaching 42.6%. On the other hand, the means of payment presented a slight reduction of 0.1%, mainly explained by the fall in savings bank deposits, characteristic of the period after the receipt of the complementary half annual salary.

• The monthly expansion of private M3 continued to be explained by loans in pesos to the private sector, which maintained a significant dynamism favored by the BCRA’s policies aimed at promoting financing for productive activity. During the month of August, public sector and external sector operations had a contractionary effect.

• Loans in pesos to the private sector grew by 2.7% ($10,710 million), an increase that was similar to that recorded in the previous three months. In this way, they continued to show a high growth rate in year-on-year terms (38%). The increase in the month was explained both by the lines most related to commercial activity, such as documents and advances, and by those more associated with consumption, credit card financing and personal loans.

• In August, a new tender for the Bicentennial Productive Financing Program (PFPB) was held. On this occasion, $159 million were awarded. Since the beginning of the PFPB, the total funds disbursed amount to $5,387 million, about 76% of what was awarded.

• In August, the bank liquidity ratio of the segment in pesos (sum of cash in banks, current accounts of entities in the Central Bank, net passes with said entity and the holding of LEBAC and NOBAC as a proportion of deposits), increased 0.2 p.p. and stood at 31.7%. The asset that explained this increase was the balance of passes in the Central Bank which, in terms of deposits in pesos, grew 0.9 p.p. compared to July. On the other hand, the current accounts of the entities in the Central Bank in relation to deposits decreased, as a result of a change in the regulations of the Minimum Cash regime that began to take effect as of this month. With the aim of encouraging the installation of ATMs in less banked areas and tending to ATMs that can be used by the entire public (and not only by the bank’s customers), it was decided to include a deduction from the requirement of reserve requirements based on cash withdrawals made through ATMs that are not for the exclusive use of the customers of each entity. This deduction is higher for ATMs located in more remote areas and for those located outside the branches.

• Money market interest rates showed dissimilar movements in August. The interest rates paid by financial institutions to depositors (passives) showed a slight increase. In fact, the interest rate on all new forward transactions in pesos averaged 15.1%, registering an increase of 0.2 p.p. compared to the July level. On the other hand, among those applied to loans in pesos to the private sector (active), the interest rate on current account advances to companies (for more than $10 million and up to 7 days of term) and that corresponding to mortgage loans to individuals were reduced compared to the averages of July. For its part, the monthly average interest rate on signature-only documents remained the same as in the previous month, while those corresponding to the interest rates on pledge loans and those granted through document discounting increased slightly.