The jump in the currency led companies to cancel much of the foreign currency credits. Families also cut expenses abroad
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<p><span style="font-weight: 400;">The high rates in pesos and the greater reluctance of banks to grant new loans to the private sector did not prevent companies from increasing their debts in pesos during August, mainly with short-term lines. On the other hand, the jump in the dollar led many companies to cancel their debts in foreign currency and families to pay most of the balance in that currency in foreign currency.</span>
Strictly speaking, the discount stock of documents (checks and promissory notes) in dollars fell 676 million dollars, down 5.2%. Something similar happened with the current account advances in dollars, where the fall was 43 million, just over 11% of the stock. These two lines concentrate almost 83% of all foreign currency financing granted by banks.
The trend shows that companies, on the one hand, stopped borrowing in dollars after the currency jump; and, on the other, they sought to cancel their financing early. Due to the prudential regulations that the BCRA imposed after the 2001 crisis, banks can only finance exporters or exporters' suppliers with dollars. That is, to those who have proven income in foreign currency.
After the emergency meeting that Sunday afternoon had Guido Sandleris with the main banks to guarantee the delivery of dollar bills, it was revealed that the monetary agency asked them to charge most of their loans and to stop the granting of new lines. Anyway, a banker who participated in that meeting confirmed to Professional that this message never existed and that the fall is basically due to the fact that companies stopped taking these loans.
"The volatility of the exchange rate has limited the demand for these operations to a minimum. In addition, the rise in country risk and its impact on the cost of financing in foreign currency acts as an incentive to indebtedness and cancellation of operations," he said. Guillermo Barbero, partner of First Capital Group in a press release.
Another trend that was recorded in August was that many households took advantage to cancel the balance of their dollar cards. In fact, According to the latest data from the BCRA, as of August 30, the stock of loans with dollar cards fell by US $ 86 million, a 21.45% cut. This is partly explained by the fact that many families cut their expenses abroad and others sought to cancel as much of their balance as possible, to avoid the risk of a new jump in the price.
Companies borrow in pesos
On the other hand, as of August 30, the stock of advances in current account stood at $ 174,320 million, an increase of 26,003 million (17.53%) compared to the level at which the month began. Thus, in nominal terms it is the highest jump for this type of financing, also known as the "overdraft", and one of the most used by companies to finance their daily cash.
The rate applied by the banks for the "red" in the current accounts began around 64% per month, but with the jump experienced by the Leliq after the PASO, interest reached 85% annually and now arrives at 90%
Despite this increase in the cost of credit, many companies saw it as the best alternative to make pesos, either to cancel debt in dollars or to avoid selling the dollars they had treasured. A fact that shows this is that on Monday post STEP, when the foreign currency skyrocketed almost 30%, the stock of advances increased just over 25,000 million pesos, a rise more than important for a single day.
Along the same lines, the discount of documents in banks grew $ 8,278 million, an increase of 3.78% after closing July with a fall of 4,458 million. Here there are many banks that continue to offer a 28% rate, as part of the subsidy plan that the Government has been implementing for several months.
"Really, this increase in indebtedness draws attention. We believe that it originates from capitalized interests and not in new financing requested," says Barbero.
Now 12 revive card payment
With respect to families, there was also a certain rebound in credit card financing in pesos, driven largely by the Now 12 plan revived by the Government. Strictly speaking, the stock increased $ 16,181 million, an increase that although it represents a jump of only 3.9%, is the strongest in this segment in many months.
"The price increase in semi-durable goods stimulates the acquisition of operations of the Now 12 program, as the consumer aspires to obtain an advantage by buying in fixed and interest-free installments. In this way, a socioeconomic segment with greater purchasing power and a low propensity to borrowing is incorporated into the market, "said Barbero.
All these increases, however, occur in a context of falling credit in real terms, since in all the lines the growth was lower than inflation.
The recession that began in the middle of last year caused many companies and families to reduce their funding level, but the monetary adjustment that Guido Sandleris faced since October – as part of the agreement with the International Monetary Fund – accentuated this trend, which is far from showing a rebound.
This plan not only led to rates at exorbitant levels, moving away the financing possibilities to the private sector, but also captured much of the liquidity of the banks with the famous Leliqs, what in economy is known as "crowding out". That redesigned the banking business, with entities focused on placing their pesos in the Central Bank instead of financing companies and individuals.
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