Monthly Monetary Report

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

Summary

• Total means of payments (M2) reached an average of $203,300 million in February, with a monthly decrease of 0.4% associated with the seasonal behavior of the components of private M2 (current in the hands of the public and private demand deposits). Private means of payment (private M2) showed a monthly reduction of 1.4%, with a slight monthly growth in seasonally adjusted terms.

• Total deposits in national currency increased 1.4% in the period, driven essentially by those belonging to the public sector. In this sense, public sector placements showed a growth of 5.3%, which was explained by increases of similar magnitudes in demand and fixed-term deposits. For its part, total private deposits remained at levels similar to those reached in January, with decreases in demand placements (1.4%) and increases in fixed-term deposits (1.5%). With respect to the latter, the increase was essentially evidenced in the placements corresponding to the wholesale segment (more than $1 million), which advanced partially favored by the positive statistical carryover from January.

• In February, the entities managed liquidity in accordance with what was expected for the last month of the quarterly period considered for the measurement of reserve requirements. Bank reserves (sum of the current account at the Central Bank and cash at banks) were reduced and net passes with the Central Bank increased. The surplus of the quarterly Minimum Cash position ended at 0.6% of deposits in pesos. The measure of bank liquidity, which includes the assets considered to integrate reserve requirements and net passes with the Central Bank, amounted to 21.8% of total deposits in pesos. Meanwhile, it reached 38.8% of deposits when also considering the holdings of LEBACs and NOBACs of the entities, 1.5 p.p. above the level it presented in January.

• Loans in pesos to the private sector softened their pace of expansion in February, mainly as a result of seasonal factors associated with the summer recess after the holidays. The average balance stood at approximately $120,700 million, registering a growth of only 11.9% YoY. Loans mainly for consumption increased in the month by 1% ∺$510 millionሻ, with a dissimilar behavior between their lines, while loans with real collateral increased in the period by 0.7% ($170 million). Meanwhile, loans destined to finance mostly commercial activities registered a decrease of 0.9% ($400 million), mainly associated with the statistical carryover from January.

• The average interest rate in the interbank market decreased by 0.4 p.p. compared to January to 8.5%. Similarly, the interest rate paid by private banks for fixed-term deposits in pesos of more than $1 million and up to 35 days (BADLAR) was reduced by 0.3 p.p. and stood at 9.5%. Meanwhile, in the retail segment (deposits of up to $100,000), private banks kept interest rates paid close to 9%. The BCRA’s passive repo rates remained at 9% and 9.50%, for 1 and 7 days, respectively.

• Interest rates charged on loans registered decreases compared to the average observed in January, highlighting the decrease in consumer financing rates. According to preliminary information for Capital and GBA, interest rates on personal loans registered the largest decrease of the month (1.3 p.p. compared to the previous month) to reach a level of around 33.2%. On the other hand, among commercial loans granted by private banks in Capital and GBA, the interest rate on current account advances (considering the total number of operations) remained at a level close to 20.8%. And in those with prior agreement, granted to companies, for up to 7 days and for amounts greater than $10 million, it stood at 10.3% with a decrease of 0.5 p.p., compared to the average observed in January.