Circular Foreign Exchange Operations and Movement of Funds and Securities with the Abroad - CAMEX 1 - 74

CENTRAL BANK OF THE ARGENTINE REPUBLIC
COMMUNICATION "A" 491 04/06/84
TO FINANCIAL ENTITIES AUTHORIZED TO OPERATE IN EXCHANGE AND EXCHANGE BROKERS:
Ref.: Circular FOREIGN EXCHANGE OPERATIONS AND MOVEMENT OF FUNDS AND SECURITIES WITH THE ABROAD CAMEX - 1 - 74.
We address you and through you to those interested, to communicate to you the modifications that have been decided to be introduced in the provisions made known by the following circulars, replacing in each case the texts of the points or sections as indicated.

I - Communication "A" 229 of 24.9.82
3. Future rate.
Apply from 11.6.84 the future rate equal to the percentage variation, which records the quotient between the index elaborated with the interest rate that the Central Bank determines as representative of the market of financial transactions between third parties residents in the country (acceptance market) and the index elaborated with the LIBO rate for one-month eurodollars. The index mentioned in the first term, will reflect daily a variation equal to the value of the daily rate equivalent to the effective annual interest rate received by investors in funds in the market of financial transactions between third parties residents in the country, which the Central Bank determines as representative.

II - Communication "A" 327 of 1.6.83.
4. Future rate.
b. The index mentioned in the previous point will reflect daily - from 11.6.84 - a variation equal to the value of the daily rate equivalent to the effective annual interest rate that the Central Bank determines as representative of the received by investors in funds in the market of financial transactions between third parties residents in the country, plus a charge of 0.80% effective monthly. When the holder of the forward operation is a financial entity authorized to operate in exchange (Categories B and C), the index mentioned in the previous paragraph will reflect daily a variation equal to the value of the daily rate equivalent to the maximum effective monthly interest rate fixed by the Central Bank for credit operations in Argentine pesos, reduced by 0.80% effective monthly.

III. In both cases, the effective annual interest rate of the acceptance market will be that corresponding to the second business day prior to the date of the index.
IV. Communication "A" 378 is repealed.
V. This circular replaces and annuls Communication "A" 489 of 31.5.84 because material transcription errors slipped into it.
Attached is the calculation method corresponding to the future rates of forward operations.
We greet you very respectfully.
CENTRAL BANK OF THE ARGENTINE REPUBLIC
Horacio A. Alonso Pedro Camilo López
General Manager General Manager

ANNEX

C.B.R.A. METHOD OF CALCULATION OF FUTURE RATES FOR FORWARD OPERATIONS
Annex to
Comm. “A” 491
ADJUSTMENT INDEX FOR FORWARD OPERATIONS
The index defined in point 4. B) of this Communication, corresponding to day t, is calculated from 11.6.84 as follows:

It = It - 1 [ 1 + mt - 2 + ( 1 + 0,0008)^(30/365) - 1 ]

where:
t: denotes the day of renewal of the forward operation. mt: effective annual interest rate, which the Central Bank determines as representative of the credited to investors in the market of financial transactions between third parties residents in the country, expressed as a decimal, corresponding to day t. It was defined I0 = 1 on day 1.6.83

If the holder of the forward operation is a financial entity authorized to operate in exchange (Categories B and C), the index defined in point 4. b) of this communication, corresponding to day t, is calculated as follows:

It = It - 1 [ 1 + jt - 1 ]^(30/365) - (1 + 0,008)^(30/365) - 1

where:
jt = maximum effective interest rate corresponding to a 30-day term, for credit operations in Argentine pesos, fixed by the Central Bank of the Argentine Republic valid on day t and expressed as a decimal. It was defined I0 = 1 on day 1.6.83

CALCULATION OF THE FUTURE RATE
Alternative i) of point 4. a)
I. The future rate in the case where the amount of the income tax on interest payable abroad is not borne by the local debtor is the following:

ft = (It+180 / It)^(180/365) - 1

where:
ft : future rate, corresponding to day t, expressed as a decimal.
Lt : LIBOR rate published by the Central Bank corresponding to day t in the interbank market of London, expressed as a decimal.

II. If the amount of the income tax on interest payable abroad is borne by the local debtor, the formula to apply is the following:

ft = (It+180 / It) * (1 + Lt-2 + 0,0275) / (1 + St+180) - 1

where:
St : denotes the rate, valid at moment t, corresponding to the withholding for the income tax on interest payable abroad, when they are borne by the local debtor, expressed as a decimal.

Alternative ii) of point 4. a)
I. The future rate in the case where the amount of the income tax on interest payable abroad is not borne by the local debtor is the following:

ft = (It+180 / It)^(180/365) - 1

where:
Pk = PRIME rate, in annual terms, expressed as a decimal, valid on day k.

II. If the amount of the income tax on interest payable abroad is borne by the local debtor, the formula to apply is the following:

ft = (It+180 / It) * (1 + pt;t+180) / (1 - St+180) - 1

C.B.R.A. METHOD OF CALCULATION OF FUTURE RATES FOR FORWARD OPERATIONS
Annex to
Comm. “A” 491

where:
pt;t+180 = is the arithmetic average of the PRIME rates, mentioned previously, with the surcharge of 2 5/8, corresponding to the period comprised between the date of renewal of the forward and the 180 days following.