Friday , June 18 2021

The size of the central bank is at least six months: when will it affect the loans

The base interest rate on the economy broke the level it had before last exchange rate on Tuesday at the end of last August. The yield that the Central Bank pays for its Leliq is already 44.35%, so this year's fall is falling. 15 percentage points, which have not yet turned into a similar decline in corporate finance or personal loans.

In the last days of January, the Central Bank has accelerated the pace of lowering the interest rate, which has to pay financial institutions to place their liquidated letters, a 7-day debt instrument that serves as the "lighthouse" for the whole economy, The first working day of 2019, this yield was 59.25%. But preserving the tranquility of the exchange rate, with a dollar under the floating group, paved the way for a faster reduction in speed.

At the same time, although at a different rate, the interest rates of the bank, the rates they are credited have also begun to surrender. Current account advances, a common mechanism by which companies receive fresh money to cover costs, began the year at a level slightly above 63%. This Tuesday, this figure fell to 51.9%, according to updated data of the monetary authority. Economists still believe that the level is high and keeps credit away from the potential of SMEs.

In the case of personal loans, the interest accrued by the financial system fell much slower, While at the beginning of January it is 62.3%, the latest data shows that the average rate is 61.3%, slightly more than one percentage point.

The other side, meanwhile, will be a fall in passive bank interest, those who pay to their customers to capture their money, such as in fixed terms. Always, taking into account the average value produced by BCRA since the beginning of the year for deposits between 30 and 44 days, it is extracted from the savers decreased from 46.5% to 38.4%, Beyond a decline of eight percentage points, it still remains in positive territory compared to inflation. Therefore, this investment alternative still offers a "real" rate.

Some analysts expect that at this point the rate may continue to fall, not only for Leliq, but for the rest. According to financial markets analyst Juan Manuel Carnevale, Leliq's percentage will decrease comfortable to 37% ", According to his perspective, "if inflation starts to fall over the next few months, even the level will be lower". "It is logical to assume that the active interest rates fall because of the competition between the banks that will fight for big clients, so I do not see high levels much longer without justification," he said.

On the other hand, Lucia Pezzarini, an LCG consultant economist, said that "today everything seems to be much clearer and more favorable, with the US Federal Reserve not raising interest rates (which favors emerging markets) , I think the BCRA does not exist much more room to continue to hurry of the fees. "

In this sense, he commented that "it is not quite clear that in this scenario in which you do not have a certain political uncertainty but it is open, the exchange risk remains latent, "This scenario is very recent and one can not guarantee that it will be sustainable," said Pazzarini.

In any case, with the path she has traveled so far, to what extent will the Central Bank feel comfortable? "There is no fixed number, but should be sought in order to disarm the costs Leliq has for BCRA, but until the dollar is not moving"This is the criterion, as long as it does not move, and so far I do not see any short-term tensions, we have to continue to reduce it," Carnevale said.

Pezzarini added that there is a correlation between expected inflation (currently around 29% for the next twelve months) and the interest rate offered by the Central Bank. "BCRA must ensure a positive real rate (over inflation). promoting savings in pesos and not in other types of currencies. That's why you can not reduce the percentage much more. The tide of trust must not lead to an excessive reaction to the Central because there may be a new wave of uncertainty, and this the exchange rate will be triggered againhe concluded.

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