Circular LISOL 1-117. REMON 1-728. Minimum Liquidity Requirements. Minimum Cash Requirements. Supplementary Standards

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
__________________________________________________________________ COMUNICACION " A " 2359 30/08/95 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 117.
REMON 1 - 728.
Minimum Liquidity Requirements.
Minimum Cash Requirements.
Supplementary Standards

We address you to inform you that this Institution has adopted the following resolution:

"1. Incorporate into point 1.3. of the resolution disseminated by Communication "A" 2350 (text according to Communication "A" 2353) the following concepts:

"1.3.1.4. Bank Liquidity Notes of the National Government, in whose issuance conditions it is established that they are backed by an amount equivalent to the issuance deposited in the Central Bank.

"1.3.1.5. Securities of the country (public and private) provided that the local entity is the holder of the right to exercise a put option on the securities to a bank abroad that has at least one rating "A" or higher granted by one of the international risk rating agencies according to the list contained in point 6. of Communication "A" 2269.

It must be provided that the exercise of the option can be carried out at any time within the following 90 days.

The exercise value of the option will be counted as integration.

The computation of this integration will be admitted provided that:

i) the entity agrees with the counterparty that it informs Deutsche Bank Securities Corporation, New York, about the execution of the option contract, adjusted to the notification model established by the Central Bank.

ii) the original version of the option contract corresponding to the entity and the relevant public securities are kept in custody at Deutsche Bank Securities Corporation, New York, or at the custodians designated by it.

iii) the entity does not maintain contracts for financial derivative operations regarding securities of the country, whose fulfillment could mean the neutralization of those operations.

The entity must refrain from formalizing other operations with the bank issuing the option whose results, according to the applicable master agreements, may be subject to the eventual obligation to offset credits with debts.

Consequently, there are no impediments for the local entity to simultaneously be a seller of a call option regarding the titles involved in the put option, configuring a "collar" operation."

"1.3.3. From September 1995, the integration into admitted concepts will only be computable up to the following maximum limits, measured with respect to the minimum requirement of each period:

Concept | Maximum computable - in % -
Points 1.3.1.1. and 1.3.1.4. (together) | 100
Points 1.3.1.2., 1.3.1.3. and 1.3.1.5 (together) | 50 Point 1.3.1.5. (within the preceding margin) | 10

The first period of application of these computation limits will be that comprised between 1.9 and 30.9.95."

2. Substitute, with effect from 1.9.95, point 1.4. of the resolution disseminated by Communication "A" 2350 (text according to Communication "A" 2353), with the following:

"1.4. Minimum Requirements.
From 1.9.95, the requirements resulting from applying the following rates must be integrated - except in the cases detailed below -:

Concept | Rates in %
| Sept. | Oct. | Nov.

• in common checking and deferred payment accounts, in pesos and US dollars | 6 | 10 | 15
• in savings accounts in pesos and foreign currency | 6 | 10 | 15
• Usuras pupilares, special accounts for closed circles and "Unemployment Fund for workers in the construction industry" | 6 | 10 | 15
• time obligations in pesos subject to the minimum reserve of demand deposits | 6 | 10 | 15
• other deposits and demand obligations, immobilized balances in pesos, foreign currency and securities, and unused balances of current account advances formalized | 6 | 10 | 15
• deposits, obligations by "acceptances", passive securities and foreign currency swaps, and guarantees and stock exchange swaps of securities, in pesos and foreign currency and other time obligations in foreign currency:
• up to 59 days | 6 | 10 | 15
• from 60 to 89 days | 6 | 10 | 15
• from 90 to 179 days | 3 | 7 | 10
• from 180 to 365 days | 2 | 3 | 5
• more than 365 days | 0 | 2,5 | 2,5

Regarding the liabilities mentioned below, the minimum liquidity requirements will be applicable from 1.11.95, according to the following detail:

Concept | Rates in %

• time deposits of securities, demand and time obligations with banks and foreign correspondents - except foreign trade obligations -, and negotiable obligations:
• up to 59 days | 15
• from 60 to 89 days | 15
• from 90 to 179 days | 10
• from 180 to 365 days | 5
• more than 365 days | 2,5

For non-bank financial entities, the provisions on the integration of minimum liquidity requirements, regardless of the nature of the liabilities, will be effective from 1.11.95."

3. Establish, from 1.9.95, the following minimum cash requirements:

Concept | Rates in %
| Sept. | Oct. | Nov.

• in common checking accounts in pesos and US dollars | 20 | 10 | 0
• in deferred payment checking accounts | 0
• in savings accounts in pesos | 20 | 10 | 0
• other demand and time obligations in pesos | 20 | 10 | 0
• fixed-term deposits in pesos:
• from 30 to 59 days | 0
• 60 days or more | 0
• obligations by "acceptances", passive securities and foreign currency swaps, and guarantees and stock exchange swaps of securities:
• from 30 to 59 days | 0
• 60 days or more | 0
• Usuras pupilares, special accounts for closed circles and "Unemployment Fund for workers in the construction industry" | 0
• in savings accounts, other demand deposits and immobilized balances, in foreign currency (Com. "A" 1820) | 20 | 10 | 0
• fixed-term deposits in foreign currency (Com. "A" 1820):
• from 30 to 59 days | 0
• 60 days or more | 0
• Forward purchases of securities and foreign currency, 30 days or more | 0
• Spot purchases for settlement of securities and foreign currency, regardless of term | 0
• negotiable obligations | 0

4. Add to the end of the second paragraph of point 1.6. of Communication "A" 2350 (text according to Communication "A" 2353), the following:

"Likewise, the designated officials will be responsible for changes in resource collection policy that imply an arbitrage aimed at evading minimum liquidity requirements, such as extending the term of operations associated with the early cancellation of obligations."

5. Approve the notification model for the put option contract, referred to in point 1.3.1.5. of the resolution disseminated by Communication "A" 2350 (text according to point 1. of this resolution), which appears in the Annex.

6. Establish, with effect for the computation period comprised between 1.8 and 31.8.95 and for the subperiod between 16.8 and 31.8.95, at 0% the minimum liquidity requirement rate on time deposits and other obligations in national currency when it concerns the same concepts as the minimum cash in pesos subject to the requirement of demand obligations."

We salute you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Alfredo A. Besio Miguel A. Kiguel
Manager of Standards for Subgeneral Manager
Financial Entities Area of Economy and Finance

ANEXO

+------------------------------------------------------------+ I B.C.R.A. I MODEL OF NOTIFICATION OF I Annex to I PUT OPTION CONTRACT ICom. "A" 2359I +------------------------------------------------------------+

1. English version:
   Deutsche Bank Securities Corporation
   Att. Mr. Michael Tierney
   We inform you that (name of the seller of the option) has entered with ( argentine entity's name) into the following put option transaction:
   Operation: Put Option
   Style: American
   Underlying assett: (bond's name)
   Trade Date:
   Premium Value Date:
   Seller:
   Buyer: (name of argentine entity)
   Put Amount:
   Strike Price:
   Expiration Date:
   Maturity Date:
   Premium:
   Payment System: Cash Settlement/Physical delivery This contract was signed under the ISDA master agreement.
2. Spanish translation:
   Deutsche Bank Securities Corporation
   Attention: Mr. Michael Tierney
   We inform you that (name of the option issuing bank) has agreed with (name of the local entity) the following put option transaction:
   Operation: put option
   Type: american
   Underlying asset: (title involved)
   Trade Date:
   Premium Payment Date:
   Seller: (name of the issuer)
   Buyer: (name of the local entity)
   Contract Amount:
   Exercise Price:
   Exercise Deadline:
   Settlement Date:
   Premium (or option price):
   Settlement Method: by price difference or by delivery of the titles

This transaction has been carried out in accordance with the provisions of the "ISDA" (International Swap Dealers Association) master agreement.