Thursday , February 25 2021

The overdraft rate falls to the low of the Sandleris era

The current account down rate fell to 59.59%. The reduction was transferred to the check discount on the Stock Exchange and, with less force, for personal credits

The fall in rates that accelerated the Central Bank this week began, little by little, to move the general public. In the last three days the monetary agency has gone from 56.60% to 54.89% the average rate paid by the Leliqs and motivated banks to cut 171 percentage points in the interest they charge from companies for the current account advance. , to average 59.59% per year, the lowest level since the end of August last year.

The performance that the BCRA defines daily for its liquidity bills is the monetary policy rate, which also serves as a benchmark for the financial system. Thus, with each upward or downward movement of this rate, the shorter credit lines are the most dynamic ones for the changes.

In fact, the interest in current account advances took a strong leap between September and October, first when the then president of Central, Luis & Toto & # 39; Caputo took the rate to 60% and then when Guido Sandleris faced the tough monetary tightening with rates up to 73% a year. Thus, the cost paid by companies to take the money overdrawn from their current accounts, exceeded 78% per year.

Now, according to the BCRA average, the rate is 59.59%, the lowest level since August 30 when it was 47.2% manual. Note that the number is the nominal annual rate (TNA), since the total financial cost (CFT) is about 76%. Of course, this figure, in the midst of the monetary adjustment, reached more than 100% per year.

The current account down payment agreement, commonly known as "overdraft", is the line most often used by small and medium-sized businesses to fund their daily cash. With rising rates, the stock of these loans plunged $ 29,781 million in the first three months of monetary tightening and so far in January it is still stable.

Central game

One of the main factors that accelerated the fall in rates this week was a change made by the monetary agency in the way the Leliqs publish daily. Strictly speaking, at the beginning of each round, it informs an indicative value to be placed and then effectively assigns that value. No more weight or weight. Before, on the other hand, ended up putting more money than indicated and the drop in rates was very disconcerting.

What does this change entail and how does it affect the rate? Basically because banks now offer lower rates for fear of getting out of court and not making them pay their pesos. "The BCRA has changed the bidding method," said Santiago López Alfaro, partner of Delphos Investment. "They now announce value and as banks do not want to be left out, the endogenous rate falls faster.".

Where this impact impacted for the first time was in the call market, loans between day-banks, which are the liquidity thermometer of the financial system. On Friday, the average rate was 53.21%, while yesterday it operated around 46% a year.

What led the monetary agency to accelerate the fall in rates was the nominal decline of the dollar, which until Monday of this week was operating increasingly far from the zone of nonintervention, and did not even react to the BCRA purchases. During the week, with the Leliqs auctions, it injected just under 79,000 million pesos and remains within the zero growth target of the Monetary Base to close another month with compliance.

Thus, with more pesos in the market and with a lower income for the weights, the dollar was not slow to react positively.

In parallel, the rate paid by SMEs to cash checks at the Buenos Aires Stock Exchange also followed the trend that marked the Central. According to the Argentine securities market daily report, where these instruments are operated, yesterday the discount rate of a guaranteed 30-day check was around 43.26% per year and 43.10 within 60 days. more than one percentage point from the previous week.

In lines for families, part of the drop in rates began to be transferred to the cost of personal loans, albeit in a much more timid manner. According to the BCRA's latest data, on January 29, the average rate on these loans was 63.2%, almost at the same levels as in previous days, but almost two points lower than the one charged 10 days ago.

"In lines such as personal loans, we should expect the rate reduction to be consolidated before transferring it to customers. It is always sensitive to change, but it is not as sensitive as the short term," they explain in a private bank.

Until when is the descendant

In the city, they believe the rate cut will continue in the short term, but not as aggressively as it did this week. "We have to see how increases in fares and transportation impact inflation. It is still not very clear that it is going down," says the head of a local bank table. "This is what will define that the rate drop occurs in a sustained way," he adds.

The external context seems to be playing in favor of local assets. Although it was almost ruled out that the Federal Reserve would not change the rate yesterday, its confirmation gave a new boost to stocks and peso bonds. This adds negative pressure on the dollar and may give the monetary agency more air to continue lowering the rate without fear of affecting the exchange rate.

Be that as it may, and although rates are at very high levels, this week's cuts have begun to be shifted to families and businesses, something critical for the productive sector to start rising.

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