Summary
In December, the BCRA again met its monetary base target. The average monthly balance stood at $1.337 billion, $14 billion below the target for the month, achieving an over-compliance marginally below the target of $16 billion determined at the December meeting of COPOM. Among its components, the evolution of the circulating currency held by the public stood out, which presented a higher increase than seasonally expected, reversing the trend it had shown throughout the year.
The BCRA has completed the process of dismantling the LEBAC stock. The monetary expansion generated by the maturity of these securities was only partially offset by LELIQ, which made it possible to meet both the partial recovery and the seasonal increase in the demand for transactional money.
Part of the increase in demand for transactional money meant a slowdown in the growth of time deposits in pesos in the private sector, due to the liquidity needs of companies, which were higher than in previous months. The average monthly balance of fixed-term deposits in the private sector grew 3% in December.
Liquidity absorption through LELIQ continued to be carried out through daily tenders. Average interest rates on LELIQ tenders declined through Dec. 6 and then remained relatively stable. This stability in rates reflects the greater demand for working capital and its lower elasticity to interest rates. At the end of the year, the average rate paid by the LELIQs was 59.3%, 1.5 p.p. below that observed at the end of November and 14.2 p.p. below the maximum it had reached on October 8.
Interest rates paid on time deposits in pesos decreased compared to November, reflecting part of the change in trend of the LELIQ rate. In particular, the BADLAR of private banks ended December at 49.5%, 1.8 p.p. below the end of November. A similar trajectory was followed by the TM20 of private banks, which ended the year at 51.7%, accumulating a monthly drop of 3 p.p.
In real and seasonally adjusted terms, loans in pesos to the private sector decreased 4.8% compared to the previous month, with a fall in all lines of financing. In this context, some lines registered decreases in their interest rates. The interest rate on personal loans averaged 63.9%, showing a decrease of 0.7 p.p., and the rate charged for discounted documents averaged 58.8%, 4.3 p.p. below last month.
