Monthly Monetary Report

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

1. Synthesis

• Growing economic activity continued to drive increased demand for private sector transactional money. In addition, the stable conditions that continued to characterize the local money and exchange markets favored the strengthening of the broader demand for money, which includes those components not directly related to transactional motives, such as time deposits.

• Total means of payment (M2) reached a year-on-year rate of change of 23.8% YoY in September (with an average monthly balance of $221,240 million), slightly below the base scenario of the updated Monetary Program.

• Fixed-term placements in the private sector continued to accelerate their pace of expansion, showing an increase of 3.9% ($2,900 million), with increases of similar magnitude in the wholesale and retail segments, registering the highest growth in recent years in the quarter. For its part, the broader monetary aggregate in pesos of the private sector (private M3) registered a growth of 2.4% in September (29.9% y.o.y.).

• Banks’ liquidity increased by 0.8 p.p. in September and was applied to longer-term assets (LEBAC and NOBAC), as has been the case throughout the year. Thus, the ample liquidity ratio reached 40.3% of total deposits in pesos on average for the month.

• In the primary market for LEBACs and NOBACs, yield interest rates decreased along the entire yield curve, mainly in shorter-term instruments. Interbank market interest rates remained stable, with greater volatility towards the end of the month. Interest rates paid on time deposits also remained stable: the BADLAR of private banks stood at 10.5%, 0.1 p.p. above the average recorded in August; Meanwhile, the amount paid by private banks for retail placements in pesos (up to $100,000), remained at 9%

• Stability was also observed in the interest rates charged on loans in pesos to the private sector. Among commercial lines, the average rate of total current account advance transactions remained around 18.5%, and that charged for discounted documents remained at 13.3%. Interest rates on mortgage loans to families did not register large monthly variations either, standing at 14.2%, while the rates corresponding to financing with collateral remained around 17%. On the other hand, the interest rate on personal loans, which had been showing months of successive falls, showed a slight increase (0.3 p.p.), standing at 29.3%.

• Loans in pesos to the Private Sector grew 2.6% in September ($3,765 million), and in this way, accumulated a year-on-year growth of 26.7%, 2.4 p.p. above what was observed in August. The increase in loans in the month was led by financing instrumented through documents and personal loans. Financing instrumented through documents showed an increase of 4.4% ($1,220 million), while personal loans increased 3.6% ($1,295 million).

• Within the framework of the Bicentennial Productive Financing Program (PFPB), which aims to grant long-term funds to financial institutions, in order to improve the supply of credit for investment and productive activity, with a total financial cost fixed in pesos, the first auction of funds was carried out. The total amount of resources tendered amounted to $230 million, while the bids received reached $295 million, exceeding the total tendered.