Summary
• Faced with a scenario of persistent volatility in international markets, the demand for local money stabilized in November after the fall recorded in October. The M2 monetary aggregate registered an average monthly balance of $159,470 million, showing a year-on-year growth of 14.1%.
• To understand the behavior of monetary aggregates in November, it is necessary to consider their variations between the end of the month, since their fall in October left a significant negative statistical carryover. M2 grew 1.4% throughout the month while M3 in pesos ended at a level of almost 1% above that of the end of October. As for the components of M3 in the private sector, both working capital held by the public and private deposits registered increases of 1.1% and 1.3%, respectively.
• The liquidity ratio of financial institutions (the sum of cash in banks, current accounts of banks in the BCRA and passive passes for the BCRA) remained at historically high levels and averaged 20.3% of deposits in pesos. This measurement registered practically no variation with respect to the previous month. When adding the holdings of LEBAC and NOBAC of the entities, the liquidity ratio stood at 37.2%.
• To improve the management of bank liquidity in a period of high demand for transactional money such as December, it was decided that as of December 1, 100% of the cash held by the entities will be computed for the integration of reserve requirements. Additionally, continuing with the policy of providing resources if necessary, in mid-November, the limit available for the granting of active fixed-rate passes was increased, which went from $3,000 million to $10,000 million for all entities.
• The normalization of private deposits in pesos meant that from the second half of November onwards a downward trajectory prevailed for short-term interest rates, resulting in falls in the most representative segments of the money market. In particular, the interest rate on interbank loans (calls) for 1-business day operations ended the month at 12.8%, 1.5p.p. less than the last day of October. For its part, the BADLAR rate of private banks stood at 18.7% at the end of the month, with a fall of 4.3 p.p. compared to the level recorded at the end of October.
• Loans in pesos to the private sector showed an increase of 0.5% ($570 million) throughout November. In this way, they continued to soften their rate of expansion, varying in year-on-year terms by 26.4%. The growth of the month under analysis was driven by personal loans and credit card financing, which together increased 0.8%.
