The increase in consumer loans due to better interest rates and financing for agriculture due to climate impacts kept the segment dynamic.
He credit The growth in the non-financial private sector remained dynamic during the second quarter of 2024, growing by 11.3% year-on-year, equivalent to a real increase of 6.7%. The main driver of this growth was the consumer creditswhile the loans to companies They remain on a downward trend in pesos, but registered an increase in dollars due to the agricultural sector.
He Central Bank of Uruguay (BCU) published the Monetary Policy Report corresponding to the second quarter of the year. There, among a wide range of data, the monetary authority also highlighted the growth of the bank credit in pesoswhich maintains a trend growth rate of around 2.4% annualized in real terms up to June. This means a year-on-year increase of 11.3%.
One of the main reasons for this increase is the drop in interest rates, which, as noted by the BCU In its report, it maintains a downward trend, in line with the cuts that have been made on the Monetary Policy Rate (MPR)that is, the reference for the banking sector.
In this regard, it is worth remembering that the last meeting of the Monetary Policy Committee (Copom) decided to keep rates at 8.5%, after having cut them by 50 basis points in April. As regards the consumer credit ratethis rose by around 28.6% in June for loans granted with authorization.
This lower average rate was what led to improving the credit conditions and, therefore, more people turned to bank financing, mainly through the consumer credit.
Drought boosted business lending
He foreign currency creditmeanwhile, grew at an interannual rate of 12.5% measured in dollars during the second quarter, almost entirely destined for companies. This meant an annualized monthly variation of 8.1% to June.
In this segment, growth is explained mainly by the impact of the historic drought had in the agricultural sector, which not only generated the need for financing not only by agricultural companies, but also by offering more alternatives by banks and financial institutions. This was also influenced by the shorter-term effects of the floods and excessive rainfall that occurred at the beginning of autumn.
The commercial sector also ranked second as a driving force for business credit in foreign currency.
In total and at an aggregate level, total credit was around 29% of the Gross Domestic Product (GDP)a level higher than before the pandemic; while the degree of pesification —in a context in which the development of the segments in pesos is favored— which remains around 52.8% in June, similar to its maximum records.
Source: Ambito
