Amid market tension, Adeba’s head sees “a glimmer of hope”

Amid market tension, Adeba’s head sees “a glimmer of hope”
Amid market tension, Adeba’s head sees “a glimmer of hope”

Adeba’s head, Javier Bolzico, sees “a glimmer of hope” with the reactivation of private credit

While the market puts pressure on the price of dollars and financial assets, and does not give too many positive signals in the face of the latest measures announced by the Government, the president of the Association of Argentine Banks (Adeba), Javier Bolzicohighlighted today the change in trend that credits to private individuals registered growth in real terms in the last two months, which may be a “light of hope”.

The banker also rejected the statements made by economist and consultant Orlando Ferreres that the announcement by the Ministry of Economy to “make clear” the remunerated liabilities of the Central Bank was “a kind of Bonex plan”, and said that not even the current conditions are given for a measure of that nature to be implemented.

“We are starting from very low levels and credit continued to decline in real terms, not nominal terms. In May and June, this trend began to reverse, meaning that bank lending to the private sector grew in real terms. “That is a glimmer of hope that if it is repeated for two or three more months we could talk about a change in trend,” Bolzico explained.

During an interview with the journalist Eduardo Feinmann on Radio MitreThe banker said that “credit helps with the reactivation, but reactivation is also required for there to be demand for credit.”

“It is like a wheel that begins to turn virtuously but is basically stretched by the reactivation of economic activity,” he added.

Asked about last Friday’s announcement made by the Minister of Economy, Luis Caputo and the head of the Central Bank, Santiago Bausili, Bolzico emphatically denied that this was a measure linked to the Bonex Plan, the compulsory exchange of deposits that took place at the beginning of Carlos Menem’s government in 1989.

“It has nothing to do with the Bonex Plan. The most important thing is that none of the conditions that justified it at the time exist. The stock of monetary liabilities is falling, they are paying less and less interest, the Central Bank has bought reserves in this semester and inflation has fallen and continues to have a downward trend. None of the basic conditions that generated it are there. And we have a fiscal surplus,” he stressed.

On Friday, after the approval of the Ley Bases and the fiscal package, Caputo and Bausili explained that the axis of this second part of the plan will consist of “making transparent” the remunerated liabilities of the BCRA, since they originate from the fiscal deficit, and therefore correspond to the Treasury.

Luis Caputo and Santiago Bausili, during the latest financial policy announcement. Photo: Gustavo Gavotti

“In previous years, when there was no access to financing, monetary emission was chosen, but the emission was more than what society demanded. So, every time that deficit was greater than demand, the BCRA had to reabsorb those pesos by placing liabilities that paid interest to make them attractive. That is how this imbalance was reached,” said Bausili.

To carry out this transfer of liabilities, Bausili explained, “there will be a sterilization mechanism, similar to the one that exists today with the BCRA transfers, but they will be focused on a Monetary Regulation Letterwhich is where banks will place their excess liquidity. It will be managed by the BCRA, but it will be included in the Treasury’s balance sheet.”

In turn, meetings with banks began on Monday to implement the new Letter. But the head of the Central Bank has already announced that there will be no deadlines for its implementation.

Yesterday, Ferreres said that the measure announced on Friday was “a kind of Bonex Plan for the banks,” in a statement that generated even more noise in a turbulent financial market.

“On Friday, a kind of Bonex Plan for the banks was announced. With another name, with another type of debt, but it is the same thing that was done Erman Gonzalez with the Bonex Plan, because the debt that belongs to the Central Bank is transferred to the Treasury. And the Bonex were from the Treasury and became part of the banks. So, I think that is what the markets did not like and it was not translated that way by the press, by the politicians,” said the consultant in dialogue with Radio 10.

Bolzico was also asked about the tension on the dollar, and he attributed it to the “realignments” that are taking place following the Government’s announcements: “I think it has to do with the readjustments and part of this strategy of the Ministry of Economy to give the Central Bank more capacity to strengthen its balance sheet has to do with being able to better accommodate these monetary issues,” he explained.

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