Conditional Release of the Minimum Cash Reserve on Regulated Deposits of the Non-Financial Public Sector

CENTRAL BANK OF THE ARGENTINE REPUBLIC

COMMUNICATION "A" 600
01/03/85

TO THE FINANCIAL INSTITUTIONS:

Ref.: Monetary Regulations Circular REMON - 1 - 195 and Active Operations OPRAC - 1 - 52. Conditional release of the minimum cash reserve of the regulated deposits of the non-financial Public Sector.

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

"As of 1 March 1985, financial institutions may reduce by up to 13 percentage points the minimum cash reserve requirement on the average growth of deposits and other obligations of the non-financial Public Sector subject to fractional reserve, with respect to the monthly average of December 1983, in accordance with the conditions specified below:

1. Purpose

The lending capacity derived from said release of exchange shall be channeled exclusively to the granting of evolution credits destined to applicants from the industrial and agricultural sector in general and, in particular, to address regional productive processes.

2. Beneficiaries

2.1. The users of this financing shall be applicants whose debts in the financial system as a whole, computing the assistance they may receive through this support, do not exceed the minimum amount set for the category of main clients, as established in the first paragraph of point 3. of Annex I to Communication "A" 534.

2.2. In no case may this credit assistance be granted to natural and legal persons that maintain financial investments, whatever their size relative to their total assets, that fall within the definition included in point 6.2 of the Annex to Communication "A" 467.

3. Non-compliance

Failure to observe the conditions specified in this regime shall be subject to the sanctions provided in point 9. of the Annex to Communication "A" 467. With respect to borrowers, provisions must be included in the credit contracts that enable the application of this measure.

4. Records

The entities must keep individually identified the operations arranged with the use of resources from this reduction of the minimum cash reserve, in order to facilitate verification, at any time, of strict compliance with these provisions."

We greet you very attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

ORALDO N. FERNANDEZ
Manager of Financing and Studies of the Financial System HORACIO A. ALONSO Deputy General Manager