Monthly Monetary Report

Executive Summary

In a month in which the demand for money is seasonally high, traditional means of payment, measured through private transactional M2, registered an increase of 3.2% in real terms. Adjusting for seasonality, the monthly expansion was 0.2%, with a heterogeneous behavior by component: while the working capital held by the public expanded for the second consecutive month, transactional demand deposits contracted. In the interest-bearing segment, fixed-term deposits registered a contraction in real terms and without seasonality that, although it was disseminated by type of depositor, was mostly concentrated in company holdings. Thus, private M3 registered a slight contraction at constant prices (-0.3% real s.e.).

For its part, the Monetary Base contracted 1.2% s.e. in real terms, accumulating a 9.5% real s.e. fall in the year. In nominal terms (comparing month-end balances) it registered an increase of $3.7 billion. From the supply side, the expansion was explained by tax operations and, to a lesser extent, by the purchase of foreign currency by the BCRA in the foreign exchange market. These effects were partially sterilized by the BCRA through Open Market Operations (OMAs) and repos.

Finally, loans in pesos to the private sector registered a slight expansion in real terms and without seasonality (0.3%), driven by commercial loans, which grew for the second consecutive month. In terms of GDP, bank credit in pesos stood at 9.2% and together with loans in foreign currency the ratio totaled 12.3%.