Circular CAMEX 1-108, OPASI 1-68, OPRAC 1-78: Reimbursement of Foreign Currency Deposits

CENTRAL BANK OF THE ARGENTINE REPUBLIC

COMMUNICATION "A" 724
19/07/85

TO THE FINANCIAL INSTITUTIONS AUTHORIZED TO OPERATE IN FOREIGN EXCHANGE:

Ref.: Circular EXCHANGE OPERATIONS AND MOVE-
MENTS OF FUNDS AND SECURITIES WITH
ABROAD - CAMEX - 1 - 108 - Circular PAS-
SIVE OPERATIONS - OPASI - 1 - 68. Circular
ACTIVE OPERATIONS - OPRAC - 1 - 78.

We address you in relation to Communications "A" 652 and 663 of 17.5.85 and 31.5.85, respectively, by which the measures adopted by this Institution on foreign currency deposits and the operating and reporting mechanisms applicable were made known.

In this regard, we bring to your knowledge and through you to that of all interested sectors, the provisions that this Bank has adopted on the matter.

1st - As from 1.8.85, for each account or certificate of deposit in foreign currency matured or to mature, the institutions may reimburse at maturity, to the depositors, as total or partial return of the original principal, a sum that shall not exceed 1,500 US dollars, or its equivalent in other currencies. In addition, the totality of the interest accrued up to the date of payment for the portion of the principal returned shall be reimbursed, calculated in accordance with the terms of Communication "A" 663 of 31.5.85 (point 1.).

It shall be a condition for depositors to be able to access the established reimbursement, that it be received without conditions or reservations of rights of any kind.

2nd - The institutions shall resort, first, to the realization of the holding of External Bonds acquired with foreign currency deposits and, second, to the use of the net liquid availabilities transferred at the time to the account of the Central Bank, at the Banco de la Nación Argentina, New York, as provided by Communication "C" 2108 of 27-5-85 (Telephone Notice No. 5186).

3rd - When the amounts corresponding to the returns of deposits (principal and interest, chargeable to the institutions) cannot be covered with the use of the availabilities referred to in the preceding point, the financial institutions shall realize the totality of their holding in External Bonds whatever their source of financing. As a last-resort alternative they may acquire the necessary foreign currency in the single exchange market.

Up to the amounts acquired, the institutions shall maintain in their favor the longer-term foreign currency assets corresponding to the use of the lendable capacity of foreign currency deposits, whose amounts at the time of their realization or collection shall be resold in the single exchange market.

4th - To facilitate the use of the availabilities deposited in the Central Bank, the institutions shall access the exchange market to the extent of their needs and up to the amount resulting from adding the net balance of the referred availabilities, the interest earned on the amounts already withdrawn and those corresponding to the withdrawal referred to in these provisions. For this last purpose, the withdrawal date shall be considered the business day following that of the purchase in the exchange market.

As counterpart, they shall sell to the Central Bank, charged to the referred deposit and its interest, without effecting movements of funds abroad, the resulting amount whose equivalent in australes, at the selling exchange rate communicated at the opening of the market, shall be credited to them in the usual manner.

The operations shall be formalized through the Exchange Switchboard and form 2600 shall be presented in which, in addition to the usual data and signature at managerial level, they shall record separately: a) the amount corresponding to principal imposed and b) the interest earned. In addition, on the back of the referred form the manner in which the interest was calculated shall be detailed, with mention of the dates of constitution of the deposits and of their applications, number of days computed, interest rates applied and amount of interest corresponding to each installment.

5th - In the case of partial reimbursements with respect to the originally deposited principal, record shall be left of the sums returned directly in the certificate of deposit.

6th - The exchange sales shall be reported in form 4002 A, integrated in the name of the institution, separately, according to whether they are principal or interest and operations included in points 3. or 4.

For the case of point 3. the codes to be used for the integration of the forms shall be the following: - Principal: 640 - Interest: 690.

With respect to point 4. they shall be coded: - Principal: 641 - Interest: 691.

On the back of form 4002 A, in the place reserved for "Other Data" they shall record the number of deposits that are reimbursed and the average rates applied.

We greet you very attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Oraldo N. Fernández
Manager of Foreign and Exchange
Antonio E. Conde
Deputy General Manager