Monthly report on the evolution of the monetary base, international reserves and foreign exchange market.
1-Synthesis
In December, the broad monetary aggregate private M3, in real terms and adjusted for seasonality, would have registered a monthly decrease of 2.7%, which was explained by the behavior of means of payment (private M2). Although an increase in the demand for transactional money was observed, it was linked to seasonal factors, such as the payment of the half complementary annual salary (SAC), the higher expenses of families on the occasion of the holidays and the beginning of the summer recess. Thus, adjusted for seasonality and deflated by the inflation expected for December, private M2 would have registered a fall of 4.5%.
On the other hand, term placements contributed positively to the variation of private M3 presenting an increasing trend throughout the month, driven by impositions of more than $20 million. Thus, the cumulative growth of term placements in the year would be 29.2% in real terms.
However, monetary aggregates in terms of GDP continued with the moderation process initiated in the second half of the year. In particular, considering the non-seasonal variables, private M2 as a percentage of GDP ended 2020 at 12.7%, 3.2 p.p. below the peak reached in June and private M3 accumulated a decrease of 4.1 p.p., with a ratio to GDP of 20%.
Passive interest rates remained unchanged, around the minimum guaranteed rates. These interest rates have been, since mid-November, at 37% (44% e.a.) for fixed-term placements of individuals for up to $1 million and at 34.2% (40% e.a.) for the rest of the deposits. In accordance with the objectives and plans for 2021, the BCRA will seek to promote savings and investment instruments that allow obtaining returns in line with inflation levels and the evolution of the exchange rate.
In this direction, and in agreement with the Ministry of Productive Development, a new investment instrument was developed for mining companies that allows them to obtain positive returns with respect to the evolution of the exchange rate. These companies may subscribe to Internal Bills of the Central Bank for Mining (LEMIN) denominated in pesos and liquidable at the reference exchange rate Communication “A” 3500 for a term of 180 days at a zero rate.
In real terms and without seasonality, loans in pesos to the private sector would have registered a fall of 1.7% in December. Thus, financing in pesos accumulated a seasonally adjusted nominal growth of 49% (7.4% real) in 2020.
The Central Bank was a net buyer of foreign currency in December, after progressively reducing its selling position starting in September. This allowed the balance of International Reserves to accumulate an increase of US$758 million compared to the end of the previous month, ending the year at US$39,410 million.
