Time deposits and investments: minimum rate, exclusions, and LELIQ excess net position adjustments

2020 - YEAR OF GENERAL MANUEL BELGRANO

COMMUNICATION “A” 7027
28/05/2020

TO FINANCIAL INSTITUTIONS:

Ref.: Circular
LISOL 1 - 889
RUNOR 1 - 1572
OPASI 2 - 600
OPRAC 1 - 1034
CAMEX 1 - 848

Time deposits and investments. Spot transactions to be settled and forward transactions, repos, collateralized loans, other derivatives and with mutual investment funds. Adjustments .

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We address you to inform you that this Institution adopted the resolution that, in its pertinent part, establishes:

“1. To provide, with effect for deposits that financial institutions included in Group “A” –for the purposes of the rules on “Minimum Cash”– and branches or subsidiaries of foreign banks qualified as systemically important (G-SIB) not included in that group receive from 1.6.2020 inclusive, that the minimum rate provided for after the first paragraph of point 1.11.1. of the rules on “Time deposits and investments” may not be lower than the one that the BCRA will disseminate every Friday. This minimum nominal annual rate will be 79 % of the simple average of the rates of the auctions of BCRA Liquidity Bills (LE-LIQ) in pesos of the shortest term of the week prior to that in which the deposits are made.

The preceding provision will be optional for the remaining financial institutions. The decision to exercise that option must be adopted by the highest officer responsible for managing the institution's liquidity policy or by its Board of Directors or equivalent authority, implemented within the first 5 business days of the month and notified to the Superintendency of Financial and Exchange Institutions.

2. To exclude, from 1.6.2020, from the scope of the minimum interest rate provided for in point 1.11.1. of the rules on “Time deposits and investments” those clients that are debtors of the financings provided for in points 1.5.5. (financings within the framework of the health emergency ordered by Decree 260/2020 at a rate of up to 24 %) and/or 1.5.7. (financings at a rate of up to 24 % to MSMEs not reported in the “Central de deudores del sistema financiero”) of the rules on “Minimum Cash”.

For this purpose, financial institutions must request a sworn statement from depositors when the deposited capital exceeds $ 1 million.

3. To expand, from 1.6.2020 and for financial institutions that receive deposits at the minimum passive rate established in point 1. of this Communication, the admitted excess net position of LELIQ established in point 8.2.2. of the rules on “Spot transactions to be settled and forward transactions, repos, collateralized loans, other derivatives and with mutual investment funds” by the amount equivalent to 18 % of time deposits and investments received from the non-financial private sector in pesos, measured as the monthly average of daily balances of the previous month.”

In due course we will send you the pages that, replacing those previously provided, must be incorporated into the referenced rules.

We greet you attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Matías A. Gutiérrez Girault
Issuance Manager of Rules

Darío C. Stefanelli
Principal Manager of Issuance and
Regulatory Applications