Monthly Monetary Report

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

1. Synthesis

• In November, the broader monetary aggregate in pesos (M3) showed growth of 2.2% and maintained its year-on-year expansion rate stable at around 21%. The increase was promoted by private sector deposits, although public sector placements and working capital held by the public also showed increases.

• Time deposits in pesos in the private sector showed a growth of $3,800 million (1.4%), with increases in the wholesale stratum and, mainly, in the segment of less than $1 million. In fact, term deposits of less than $1 million grew 2%, significantly above the previous two-month period, promoted by the Central Bank regulations that, at the beginning of October, established a scheme for determining minimum interest rates for deposits of individuals up to an amount equivalent to that which applies to the guarantee of deposits.

• Loans in pesos to the private sector showed a growth of 2.1% ($11,080 million) and a year-on-year variation of 20.6%. In this way, its monthly rate of change returned to values similar to those observed in August and September. The month’s growth was driven, again, by consumer-oriented loans and document-based financing.

• The liquidity of the segment in national currency of financial institutions (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 and NOBAC) averaged 39.2% in terms of total deposits in pesos and grew 0.6 p.p. compared to October. Among its components, the sustained increase in the proportion of LEBAC and NOBAC stands out.

• With regard to interest rates, those paid in the retail time deposit segment were aligned with the minimum values established by the Central Bank, while in the wholesale segment they remained relatively stable compared to last month. Meanwhile, interest rates on loans to the private sector, in general, fell. Those corresponding to commercial financing lines stood out: the monthly average interest rate of advances to companies for more than $10 million and up to 7 days of term stood at 23%, decreasing 2.3 p.p. in the month; Likewise, the monthly average
interest rate for the discount of documents was 24.9%, 0.3 p.p. below that of October and the monthly average of the interest rate for single-signature documents stood at 23.8%, falling 2.1 p.p. in the month.

• During the month, the second tranche of the local currency swap agreement with the Central Bank of the People’s Republic of China was activated. It should be recalled that within the framework of this agreement, the BCRA may request, for all eligible purposes, additional exchanges for up to a maximum of close to US$11,000 million, which represents support to implement its financial, exchange rate and monetary policy, in compliance with the mandates of the Organic Charter. International reserves reached a balance at the end of November of US$28,911 million.