Monthly Monetary Report

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

Summary

• In March, the broadest monetary aggregate in pesos (M3) showed a growth of 0.4% and 30% year-on-year. The monthly increase was driven, again, by fixed-term deposits from the private sector, which more than offset the decrease in public sector placements. Meanwhile, the means of payment of the private sector maintained their average balance practically stable.

• Time deposits in pesos in the private sector showed the largest monthly increase in the last three years. The monthly growth of this type of placement reached 6.4% and was explained by both the behavior of wholesale and retail deposits. It should be noted that the latter have maintained a sustained dynamism since the setting of minimum interest rates for personal deposits in October last year: in March they increased for the third consecutive month above 4%. Thus, fixed terms in pesos in the private sector completed an increase of 32% in the last twelve months.

• The liquidity ratio of the segment in national currency (sum of cash in banks, the current account of the entities in the Central Bank, the net passes with such entity and the holding of LEBAC, in terms of total deposits in pesos) remained relatively stable compared to February, standing at 40.7%. Among its components, a greater share of LEBAC holdings and current account deposits at the Central Bank was observed, offset by a fall in the balance of passes.

• Loans in pesos to the private sector accelerated their growth rate, registering an increase of 2.1% ($11,920 million) in the month, which was markedly higher than that observed in the same month last year. Thus, the year-on-year variation increased by more than 2 p.p. to 21.5%. The growth of the month was explained both by the lines oriented to consumption and by those aimed at financing mainly commercial activities, in line with the return of companies to full activity.

• Monthly averages for most lending rates declined again. Interest rates on loans with real collateral recorded the largest reductions of the month: the monthly average interest rate on mortgage loans to individuals stood at 19.1%, while that of lines with collateral was 26.5%. In turn, the interest rate on advances to companies, for more than $10 million and up to 7 days of term, fell 0.4 p.p., standing at 23.9%.

• Among the interest rates paid on time deposits in pesos, those of the retail segment remained stable, in line with the reference values established by the Central Bank; while the BADLAR of private banks increased 0.2 p.p. compared to February, averaging 20.8%. In the dollar segment, the interest rate on fixed-term deposits up to US$100,000 and up to 44 days of maturity averaged 1.9%, about 1 p.p. above the average for February. This behavior reflects the effect of the increase in the minimum interest rates that must be paid by the entities that participate in the LEBAC tenders in foreign currency (for a 30-day deposit they must pay 2.45% n.a.).