Monthly Monetary Report

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

Summary

• In June, the largest monetary aggregate in pesos, (M3) registered an increase of 2.2% and 31.8% year-on-year, reaching an average monthly balance of $800,400 million. Loans in pesos to the private sector continued to explain most of the growth in the aggregate, although public sector operations and purchases of foreign currency by the Central Bank also contributed to its expansion.

• Meanwhile, the largest private monetary aggregate (private M3) presented a monthly growth of 3.1%, accumulating an increase of 34.1% in the last twelve months. Among its components, means of payment increased 3.9% with a year-on-year variation of 30.4%, while fixed-term deposits in pesos of the private sector presented a monthly growth of 1.2%, maintaining a high level of year-on-year variation (44.5%).

• The broad liquidity ratio of financial institutions (measured as the sum of cash, the current account at the Central Bank, net passes with such entity and the holding of LEBAC and NOBAC with respect to deposits in pesos) fell 0.7 p.p. to 32.6%.

• Loans in pesos to the private sector increased by 2.6% ($9,790 million) in June, reaching a year-on-year variation of 40.9%. When determining the contribution of each of the lines to the growth of the month, it is verified that the main contribution was made by loans granted through documents (0.8 p.p.), even exceeding the contribution of the same month of previous years. The year-on-year growth rate of documents continued to increase (0.6 p.p. compared to May) and stood at 67.8%, driven mainly by single-signature documents, many of which were granted within the framework of the second stage of the “Credit Line for Productive Investment”.

• The Central Bank launched the third stage of the “Credit Line for Productive Investment”. The loans must be agreed during the second half of 2013, and 5% of the balance of deposits of the private sector in May 2013 will be considered, so that the amount of loans to be disbursed by the participating banks would amount to $20,086 million. As in the two previous stages, at least half of that amount must be granted to Micro, small and medium-sized enterprises (MSMEs). At this stage, the possibility is incorporated that they can (only in the case of MSMEs) allocate up to 20% of the total amount of the project to finance working capital associated with productive investment. As for the conditions of the loans, the interest rate will be 15.2% and the minimum term for which they must be granted will remain at 3 years.

• Among passive interest rates, the BADLAR of private banks averaged 16.6%, while in the retail segment, the interest rate paid by private banks for their fixed-term deposits up to $100,000 and up to 35 days reached an average monthly value of 14%.

• With regard to interest rates on loans in pesos to the private sector, the interest rate on current account advances to companies of more than $10 million and up to 7 days fell 0.8 p.p. in the month and stood at 16.8%. Meanwhile, the interest rate on financing instrumented through signature documents averaged 19.1%, with a monthly decrease of 0.2 p.p.. On the other hand, the interest rate on loans granted with collateral averaged 19%, its lowest level in the last two years, while that of personal loans averaged 33.8%, decreasing 0.5 p.p. in the month.