Circular Foreign Exchange Operations and Movement of Funds and Securities with the Abroad - CAMEX 1 - 5

BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
COMMUNICATION "A" 36 17/06/81
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 - 1-5

We address ourselves to you and through you to all interested parties, to bring to your knowledge the procedure adopted for the determination of the foreign exchange insurance rate that will be applied after the first 180 days of its validity, to contracts entered into under the regime established by Communication "A" 31 of 5.6.81.

To this end, and with regard to the local wholesale price index - general level - the use of that prepared by the INDCE corresponding to the second preceding month is established.

As an index of international inflation, the one corresponding to the wholesale prices of the United States of America, provided by the Department of Labor of that country for a similar period, will be used.

The daily variation of the index for a given month will be obtained from the difference by quotient between the variation of both rates two months prior, transformed into the equivalent daily rate.

For better clarification, an example is attached as an annex.

We salute you very attentively.
BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
Ernesto Gaba
Main Manager
Evaristo H. Evangelista
Deputy General Manager

B.C.R.A.
EXAMPLE Annex to
Comm. A 36

Taking the variation of the country's wholesale prices for the month of April (12.7%) and for the US (0.8%), the difference by quotient between both indices will be obtained:
(100 + 12.7%) / (100 + 0.8%) - 100 = 11.81%

The equivalent daily rate for June would be:
((100 + 11.81% / 100) ^ (1/30)) * 100 - 100 = 0.3727%

The value of the index, with base 100 on 31.5.81, would be on 10.6.81:
100 * ((100 + 0.3727%) / 100) ^ 10 = 103.79

Since it is already known that the variation of wholesale prices in May was 7.7% and in the US 0.4%, it is possible to calculate the value of the index, for example, for 15.7.81 in the following manner:
(100 + 7.7%) / (100 + 0.4%) - 100 = 7.27%

This last percentage is the variation of the index for July. The variation of the index for the first fifteen days of July is, therefore:
((100 + 7.27%) / 100) ^ (15/31) * 100 - 100 = 3.45%

The value of the index on 15.7.81 will then be:
100 * ((100 + 11.81%) / 100) * ((100 + 7.27%) / 100) ^ (15/31) = 115.67

on 31.7.81
100 * ((100 + 11.81%) / 100) * ((100 + 7.27%) / 100) = 119.94

17.6.81 1