CENTRAL BANK OF THE ARGENTINE REPUBLIC
COMMUNICATION "A" 1242 03/08/88
TO FINANCIAL ENTITIES:
Ref.: Circular MONETARY REGULATIONS - REMON - 1 - 428. Establishment of a special deposit. We address you to inform you that this Institution adopted the following resolution:

“ 1. Establish that, between August 1988 and April 1998, financial entities must establish a special deposit with the Central Bank, not countable for the integration of the minimum cash requirement, subject to the following conditions:

1.1. Requirement.
It will be equivalent, in August 1988, to the sum of the requirements for the non-available deposits “Communication “A” 1217” (balance as of 31.7.88 for capital and adjustments) and special “Communication “A” 1218”, multiplied by 1.25. For subsequent months, this initial obligation will decrease, cumulatively, according to the following detail:

in each of the first 9 months, 0.5% of the initial requirement in each of the next 12 months, 0.7% of the initial requirement in each of the next 12 months, 0.8% of the initial requirement in each of the next 35 months, 1.0% of the initial requirement

To this end, the initial requirement will be updated on the last day of the month prior to the one in question, based on the variation experienced in that month by the index to adjust the time deposit “Communication “A” 1241”.

1.2. Integration.
It will be verified according to the monthly average of daily balances of the deposit account. The non-remunerated excess will be added to the integration of the minimum cash requirement. Deficits will be subject to the charge and other provisions applicable to minimum cash deficiencies.

-2-

1.3. Remuneration.
The rate resulting from applying the following methodology will be applied:

1* [( 1 1* ) ] 1
−













=
∑

Π j j d n j n d j j

where:

1* : effective monthly basic interest rate of 30 days, expressed as a ratio. i*j : effective monthly passive interest rate, as a ratio, published by the Central Bank, where j varies between the (p - 1) day prior to the first day of the current month and the last day of that same month. For each day, the interest rate corresponding to the second immediate preceding business day will be taken. p : theoretical average term of the deposits. It is established at 14 days. dj : number of calendar days of validity in month t of a theoretical fixed-term deposit of p days, constituted on day j. n: number of days in the current month plus (p - 1).

1( ) [( 1 1) ] .100
30 






m
k k

where:

1* (k) : remuneration rate of the special deposit. m : number of calendar days in the current month. k : 1,01

On the first day of each month, the Central Bank will credit the interest in the respective special account, calculated on the average of daily balances of said deposit account registered in the previous month. If that average exceeds 103% of the amount required, the interest corresponding to such excess must be reimbursed, with value as of the same date.

Apply to the establishment of the special deposit referred to in point 1., the balance (capital and adjustments) as of 31.7.88 of the non-available deposit “Communication “A” 1217”, countable as provided in point 1.1.
To effect fund movements, the provisions disseminated by Communication “A” 641 will be applied. In forms 4927 and 4028, to be submitted to the Statistics and Information Department of the Public Sector (Building “Sarmiento”, 3rd floor, office 32), or in case of “telex”, the following data will be recorded:

Special deposit “Communication “A” 1242”.
Code: 53 (deposit) or 54 (withdrawal)
Account number: the one corresponding to the financial asset “at unregulated rate” (Communication “A” 733), replacing the first two digits with the number 39.

In addition, we point out that in the “Observations” table of the first Form 4027 or 4028 to be sent, the amount of the initial requirement must be reported, with the detail of the calculations performed, without which data the requested operation will not be processed.

We salute you very attentively.
CENTRAL BANK OF THE ARGENTINE REPUBLIC
Alfredo A. Besio
Manager of Standards for
Financial Entities
Julio A. Piekarz
General Submanager