For the Central Bank the Argentine saver and depositor should not worry: the local system is solid.
“The financial system began 2023 maintaining its solid features: at the aggregate level, moderate exposure to credit risk prevails with limited delinquency and high liquidity and solvency ratios,” said the monetary authority.
However, for private analysts, the latest measures –such as the authorization to use the titles they received in the last exchange as reserve requirements- undermine the foundations and the high holding of debt securities issued by the Treasury offer vulnerability cracks.
The report on the state of the financial sector that the BCRA disseminates monthly had a release date of this Wednesday, a day in which there was a collapse in the international financial markets precisely due to rumors about the state of large banking institutions.
The first result 72 hours after the crisis unleashed shows that a “contagion” effect has not yet been observed on the banks that operate in the country and the impact is concentrated in the value of the assets. This is due to the fact that national banks do not have investments in assets such as those managed by Silicon Valley Bank, with which their assets are not affected.
In the case of individuals and companies, the impact will come from the drop in stocks and bonds. This situation can generate a “poverty effect” that can delay investment or consumption decisions, which is the way in which financial crises are transferred to the real economy.
Parallel to monitoring the international situation, at this time the BCRA board must make a decision on its interest rate policy after knowing the inflation rate in February, which reached 6.6%. For six months it has remained at 75% and market operators expect a new increase to comply with the agreement with the IMF that calls for a positive real interest rate.
The discussion between the operators goes through the range of increase, although the majority favors an adjustment of 500 points up to 85%.
In addition to the possibility of integrating reserve requirements with securities taken in the last swap, analysts also questioned the option given to banks to “sell” the bonds received to the BCRA in the event of a sharp drop in prices. Translated: they were guaranteed an exit at an agreed price to gain liquidity and, for example, face an outflow of deposits.
The BCRA justified the decision by stating that “this option is a tool for entities to manage term mismatches and liquidity risk.”
According to the report published this Wednesday, the balance of private sector deposits in pesos fell by a real 1.6% (adjusted for inflation) during January. Demand accounts fell 2.5% real, while time deposits fell 0.5% real (+5.5% nominal).
On the side of the foreign currency segment, the balance of private sector deposits remained unchanged in magnitude between points. The balance of total private sector deposits (in national and foreign currency) fell 1.4% in January (+4.5% nominal).
Meanwhile, in January the gross exposure of the financial system to the private sector (contemplating national and foreign currency) was 27% of total assets, slightly below the closing value of 2022 and 4.2 points less in the year-on-year comparison.
Regarding the non-performing ratio of credit to the private sector, it stood at 3.2%, being slightly higher than the figure at the end of 2022, although 1.1 points lower compared to January of last year.