Summary
According to INDEC’s national Consumer Price Index (CPI), in August inflation was 1.4% for the general level and also 1.4% for the core, reducing compared to July’s records. High-frequency indicators suggest that in September inflation would not have managed to break the values observed since May. In this scenario, the BCRA decided to keep its monetary policy rate, the center of the 7-day pass corridor, unchanged at 26.25%. Thus, the 7-day pass corridor remained at 25.5%-27%.
The BCRA continued to restrict liquidity conditions by carrying out operations in the LEBAC secondary market. In September, it sold LEBAC in the secondary market for a total of VN $116.4 billion, which more than offset the expansion generated by the partial renewal of the month’s maturity. As a result, the average monthly net monetary absorption through LEBACs and passes was $28,800 million
Interest rates in the interbank loan market remained within the corridor established by the BCRA. On the other hand, among passive interest rates, the BADLAR of private banks showed an upward trend.
The increase in M3 continued to be explained by the components of private M2, which was once again the aggregate with the highest real growth. Time deposits in pesos in the private sector, which had been showing a sustained fall in real and seasonally adjusted terms, showed some stability throughout September.
Loans to the private sector continued to increase in real terms and on seasonally adjusted balances. Both total loans in pesos and foreign currency, as well as only in local currency, showed a monthly increase of 2.3%. All lines increased in real terms, although mortgage loans continued to stand out. In nominal terms, mortgages registered an increase of 9.2% ($7,600 million), and in the last twelve months they accumulated a growth of 63.8%. UVA financing continued to gain share in mortgage loans granted to individuals, representing 88% of the total. Since the launch of this instrument, about $27,500 million of mortgages have been granted in UVA.
Lending to the private sector outpaced deposit growth. The rest of the funding of the loan came, among other things, from passes and LEBAC. Thus, bank liquidity in local currency (measured as the sum of cash in banks, the current account of entities in the Central Bank, net passes with such entity and the holding of LEBAC, as a percentage of deposits in pesos) fell 1 p.p. compared to August, to 40.2%.
