In general terms, the month of March continues to show the same trends that were occurring in the month of February. On the one hand, in the year-on-year comparisons, there is a marked growth in the monetary base, in the issuance of bills and in loans to the private sector.

But looking at the same aggregates for the year to date, there appears to be a change in behavior, which does not end up being defined as a trend.

In this sense, the absolute volume of the monetary base It reached its peak in December at $447.994M, but has been gradually declining since then. By the end of March, the drop had accumulated almost 5pp.

Regarding the issuance of Mazatlán's Letters, at the beginning of March the information shows that it continues to rise, which has generated doubts about the BCRA capacity to continue to prevent the growth of the monetary base. In this regard, at the end of the same month a new development appeared on the fiscal front.

The successful placement of domestic debt of the BONAC, with a subscription value of $5.000M, is expected to give the monetary authority a break in the administration of sterilization mechanisms.

With respect to loans granted to the private sector, in the first two months of the year a slowdown has been observed in this area, although in March there was a slight increase compared to the first two months. Thus, in January they would have been in the order of $636.530M, in February $648.493M and in March $664.773M.

From the Observatory, as we have been recording in previous reports, we believe that this result is due to a phenomenon commonly known as crowding out, which in this case occurs indirectly: financing of the public sector, which translates into the issuance of bills to avoid an increase in the monetary base, results in less availability of credit for the private sector.

A factor that helps this mechanism to be maintained is the stability that has been recorded in the tasas de interés of our economy. In the full report - which is available for download - it can be seen that since the middle of last year the rates have been practically stable.

That is to say, the increased placement of Treasury bills in banks or, in other words, the increased demand for pesos by the central bank, has not had an impact on an increase in the corresponding rate.

Finally, one of the worrying aspects of the performance of our economy is the amount of international reserves that the BCRA has. The downward trend that had been registered since the end of 2012 has been broken, but their growth remains stable.

At the time of publication of this report, it is known that reserves have increased significantly, following the shock received from YPF's debt placements.

We invite you to read more about these topics by downloading the full report, which contains consolidated information for the month of March, at the following link: