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 News

22/07/2017 0:00 - Capital Market
NICOLÁS FERRER
Liquidity strain in the financial system gives way to higher rates

A series of circumstances have come together to dry up liquidity in the financial system, and as a result, interest rates have risen for all kind of products of diverse maturity, including time deposits and discount of deferred payment checks in local securities markets.

Persistent core inflation readings of about 1.5% per month have forced the Central Bank of Argentina to raise their reference rates for interbank loans by 250 basis points to 28.75% in just over a month. Unlike in past occasions, interest rates for time deposits have risen following the increase in reference rates. Even if time deposits still pay significantly less than bills issued by the Central Bank, they have become more attractive in real terms.

 

This rise in bank rates is a result of lower holdings of liquid assets in terms of their obligations. Statistics from the Central Bank of Argentina show that the ratio of cash and securities holdings plus deposits in financial entities to total loans has fallen from 120% in late march to 80% as of mid-November, forcing banks to become more aggressive in the origination of deposits.

At Mercado Argentino de Valores, discount rates for deferred payment checks have trended upward over the past few months. As of November 15, the average yield curve for checks of all segments was above 30%, an increase of between 200 and 400 basis points depending on the maturity of the checks.

 
 

 Institutional video


Institutional Video of the Bolsa de Comercio of Rosario (Rosario Board of Trade)

 Rosario Board of Trade

The Rosario Board of Trade is a centennial institution located in Rosario, in the most important agroindustrial zone of Argentina. Throughout its history it has created and boosted transparent, solid and reliable markets: the Grains Physical Market, the Futures Market, the Capital Market, and the Livestock Market.

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Bolsa de Comercio de Rosario Córdoba 1402 - S2000AWV
TE: (54 341) 5258300 / 4102600
TE: (54 341) 5258325 (Complejo de Laboratorios - servicioalcliente@bcr.com.ar)
Rosario - Santa Fe - Argentina

Oficina Buenos Aires Reconquista 458 piso 7° - C1003ABJ - Cdad. de Buenos Aires.
Tel: (54 - 011) 43280390/1484 43939391/9649- Fax: (54 - 011) 43939649
contacto@bcr.com.ar