Summary
In July there is a seasonal increase in the demand for transactional money due to the complementary annual salary and winter vacations, which this year were boosted by the long weekend of July 9. To mitigate its impact on the rest of the variables of the money market, it was provided that the integration of the reserve requirements in pesos will be carried out considering July and August together.
In line with the unified period for integrating the Minimum Cash requirements, the BCRA’s Monetary Policy Committee (COPOM) decided to adapt the measurement of compliance with the Monetary Base (WB) target for July and August to a bimonthly period. The average target in the period remained unchanged at $1.343 billion. The average monthly balance of the WB stood at $1,381.5 billion in July, 3% above that recorded in June.
Private sector deposits in pesos increased 2.9% in nominal terms compared to June, with a 1.9% growth in demand deposits and a 3.9% growth in time placements ($46,800 million). Thus, in real and seasonally adjusted terms, an increase in fixed terms was again observed (1.6%).
In a context of falling inflation expectations, the LELIQ interest rate showed a fall until mid-July, which was partially reversed in the last days of the month, responding to the dynamics of the pre-election periods. At the end of July, the interest rate on the LELIQ stood at 60.4%.
Interest rates paid on time deposits followed a similar trajectory to that of LELIQs. Their values continued to place them at positive levels in real terms. Thus, the rate of 30-day operations averaged 47.5% (TNA) for the month, which, considering inflation expectations for the period, implied a real monthly effective rate of 1.5%, equivalent to an annual effective rate of 19.7%.
In July, the nominal and seasonally adjusted balance of loans in pesos to the private sector grew 0.7%, driven by those granted through account advances and credit card financing.
The balance of international reserves ended July at US$67,899 million, which implied an increase of US$3,621 million compared to the previous month. This increase was explained by the disbursement of the fifth tranche of the stand-by program agreed with the IMF, which was partially offset by the net payment of debt in foreign currency of the National Treasury.
