BANCO CENTRAL DE LA REPUBLICA ARGENTINA

COMUNICACION " A " 3203 I 22/12/00

TO FINANCIAL ENTITIES:

Ref.: Circular
LISOL 1 - 324
Minimum Liquidity Requirements. Penalty Rate for Deficiencies in Integration Due to Misapplication of Foreign Currency Funds

We address you to inform you that this Institution has adopted, on the subject referenced, the following resolution:

"- Extend until December 2001 the validity of the penalty rate of 0.5% per annum on deficiencies in the integration of the minimum liquidity requirements referred to in point 7.1 of Section 7 of the norms on 'Minimum Liquidity Requirements'."

We send you attached the foundations of the measure and the sheets that, in replacement of those previously provided, must be incorporated into the ordered text of the reference.

We salute you very respectfully.

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Alfredo A. Besio
Manager of Emission of Regulatory Norms
Alejandro Henke
Deputy General Manager of Regulation and Information Regime

ANNEX: 3 pages

---

B.C.R.A.
FOUNDATIONS OF THE RESOLUTION ON MINIMUM LIQUIDITY REQUIREMENTS. PENALTY RATE FOR DEFICIENCIES IN INTEGRATION DUE TO MISAPPLICATION OF FOREIGN CURRENCY FUNDS

Annex to
Com. "A" 3203

1. The norms of this Institution establish that the lending capacity of foreign currency deposits must be applied in certain foreign currency assets, based on what arises from Law 23.758.
   Consequently, it was established that the defect in the application of these resources under those conditions determines an equivalent increase in the minimum liquidity requirements.

2. Previously, by Communication "A" 2951, the penalty rate on such deficiencies was set at 0.50% nominal annual when they had been caused by the transformation of deposits captured in pesos into United States dollar installments more rapidly than the assets -for the monthly positions of the period July/December 1999-.
   Subsequently, by the provisions made known by Communication "A" 3017, this measure was extended until December 2000.

3. Now, given that the conditions that drove this flexibility have not changed and taking into account that, in the current context and according to projections on its evolution, the non-admission of currency mismatch would impact the demand for peso resources with its consequent reflection in the market interest rate, it is appropriate to extend again the validity of the special measure adopted.

MINIMUM LIQUIDITY REQUIREMENTS B.C.R.A. Section 7. Transitional Provisions. 7.1. The penalty rate for deficiencies in the integration of minimum liquidity requirements, which are registered in the monthly positions until December 2001, will be 0.5% per annum, insofar as they correspond to defects in the application of foreign currency deposits captured with adjustment to the regulations in force in the matter, linked to the transformation into foreign currency installments of peso deposits attributable to the financing of assets in that same currency. The amount of these defects will not be computable to calculate the integration deficiency that determines the obligation to present grouping programs referred to in point 3.2 of Section 3.

Version: 3rd Communication "A" 3203 Validity:
22.12.00

ORDERED TEXT SOURCE NORM

Sec.	Point	Paragraph	Com.	Annex	Point	Paragraph	Observations
5.		único	"A" 2422	6.			According to Com. "A" 2490, with interpretative clarification.
6.	6.1.	único	"A" 2422	3.3.			According to Com. "A" 2705 and 2694.
6.	6.2.	único	"A" 2422	8.
6.	6.3.	único	"A" 2422	9.			According to Com. "A" 2648 and "A" 3112.
7.	7.1.		"A" 2951	According to Com. "A" 3203.