BANCO CENTRAL DE LA REPÚBLICA ARGENTINA

COMMUNICATION "A" 652 17/05/85

TO FINANCIAL ENTITIES:

Ref.: Circular PASSIVE OPERATIONS - OPASI-1-60. ACTIVE OPERATIONS - OPRAC - 1 - 67. AND FOREIGN EXCHANGE OPERATIONS AND MOVEMENTS OF FUNDS AND SECURITIES WITH THE EXTERIOR - CAMEX - 1- 97. Suspension of foreign currency deposit operations.

We address you to inform you that, in accordance with the foreign exchange and financial policy directives emanating from the Ministry of Economy, this Institution issued the Resolution transcribed in the Annex.

The measure adopted aims to create the conditions that allow overcoming the emergency situation in this matter presented by the current conjuncture, pointing to safeguard the stability of the financial system, with a view to defending the general interest.

We salute you very attentively.

BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
Alfredo A. Besio
Departmental Sub-manager
Manager of Standards for
Financial Entities a/c.
Antonio E. Conde
General Sub-manager

B.C.R.A. SUSPENSION OF OPERATIONS FOR
FOREIGN CURRENCY DEPOSITS

Annex to
Comm. “A” 652

1. Suspend for a period of 120 days, counted from 17.5.85, the collection and withdrawal of foreign currency deposits by financial entities included in the regime of Law No. 21.526. Time deposits will continue to be subject, until their maturity, to the interest rates and other modalities duly agreed upon.

This measure also applies to demand deposits, including balances originated in time operations not withdrawn by their holders at maturity.

2. Establish that from the originally agreed maturity and until the suspension period referred to in the previous point is fulfilled, entities will remunerate the invested capitals at the interest rate communicated by the Central Bank, calculated based on the LIBO rate.

3. Exempt from the preceding provisions deposits whose holders are International Organizations, Embassies, Legations, and Consulates accredited before the National Government, as well as their officials with diplomatic status.

4. Financial entities will communicate to the Central Bank by 24.5.85 the composition and schedule for the recovery of their active portfolio in foreign currency and a schedule of maturities of the deposits collected in said species at the close of operations on 17.5.85.

Additionally, they must deposit in the Central Bank on 20.5.85 the foreign currency availability they register at the close of operations on 17.5.85. They will proceed in the same manner to deposit in this Institution, the funds - capitals and interests - coming from the recovery of credits and investments in foreign currency to the extent that they are received.

These deposits will accrue interest at the rate communicated by the Central Bank, calculated on the basis of the LIBO rate.

5. The Central Bank may allocate, in accordance with the regulations it issues, these availabilities for the granting of rediscounts for the financing of export operations.

6. At the maturity of time deposits, if it occurs before the term provided in point 1. - and in the case of demand balances - holders may demand the restitution of the deposits to subscribe, for the total amount thereof, "External Bonds of the Republic of Argentina 1984" at a price of 93% of the nominal value, plus accrued interest.

Depositors and entities may agree on the future sale of the bonds, with the entity committing to acquire them at the end of the validity of the measure established by this document, at the price indicated in the previous paragraph. In this case, the bonds and the funds coming from the services of the same will be kept in custody, on behalf of the holder, in this Institution.

The seller may unilaterally cancel the future purchase-sale.