overall maximum restriction was set at 35 percent of each bank ’ s total assets, which is fully effective now. as a result, banks ’ exposure to the public sector accounts for less than 17 percent of total assets, vis - a - vis around 50 percent during the crisis. besides, we took specific measures to prevent those who cannot repay in us dollars from borrowing in that currency, encouraging the development of the credit market in domestic pesos. this action not only strengthened the stability of the system but also crowded - in the private sector, helping to deepen the market. in a context of high growth of credit to firms and households, the non - performing portfolio has hit an all - time low. the system has already shown profits for a couple of fiscal years now, and the process of capitalization and extension of terms for liabilities has been gathering momentum. thus, we now have a financial system that is more mature and better prepared to face any sort of disruption. lastly, the current managed floating exchange rate regime has been at the core of our monetary and financial strategy. on the one hand, it avoids ensuring a “ foreign exchange insurance ” that favors the inflow of hot money. on the other, it aims to prevent short - term volatility from affecting spending, savings and investment decisions. and it has been proven that this is the most adequate scheme for this transition towards long - term equilibrium in our economy. under a free float, the exchange rate would have reached significantly higher quotations, running serious risks of going back to the devaluation - inflation dynamics that has been so recurrent throughout argentine economic history. our actions included the – sequential and combined – adoption of a set a tools – monetary, exchange and financial regulation measures – that dodged every possible inflationary impact while injecting liquidity to the system. on the foreign exchange side, the central bank has coordinated the intervention with state - owned banks and has acted aggressively through the futures market to stabilize the exchange rate. we also resorted to the use of monetary and financial regulation instruments : buying back our own securities in auctions and in the secondary market, optimizing the strength of bills and notes auctions according to the prevailing liquidity conditions and intensifying operations in the repo market through transparent auctions, among others. all in all, central bank actions show us the consistency and effectiveness of our strategy. we proved to have the necessary “ artillery ” to preserve money and exchange market stability and, at once

a notable recovery, several features of the current macroeconomic performance indicate that the economy is still heading towards a new long - term equilibrium. neither in our history nor in the international experience is possible to find precedents for the 2001 - 2002 crisis. unlike the case of brazil, mexico or southeast asia, the abandonment of the convertibility regime included simultaneously an institutional breakdown, a huge devaluation, the destruction of the financial system and the default on the public debt. in addition, the country has a long history of macroeconomic instability. monetary regimes have unsuccessfully shifted from one extreme to the other. while in the eighties money supply grew vis - a - vis the financing of the fiscal deficit, in the past decade, the rigidity of the convertibility regime was neither consistent with the structure of the economy nor with the government fiscal behavior. there are several examples of the normalization phase that is still taking place : monetary transmission channels are just being rebuilt, since credit to the private sector accounts for only 11 percent of the economy, still far below the latin american average. therefore, patiently rebuilding the power of monetary policy and developing the required infrastructure is an important step towards consolidating growth and stability. meanwhile, monetary and financial policy should be conceived under a general equilibrium approach, where fiscal solvency, the monetary balance and external sustainability are mutually determined. so, the argentine economy is simply at different a stage after the crises compared to the current situation in other latin american countries. thus, hasty diagnosis and, as i heard from many analysts, simplistic comparisons among the various countries ’ situations may lead to inappropriate policy recommendations. the path towards an effective inflation targeting regime is a sequential one. building strong pillars is the track of a central bank that operates strategically. under these circumstances, a sustainable and long - lasting reduction of the inflation rate in argentina depends on the comprehensive, joint and coordinated action of the monetary policy, the fiscal policy, the wage policy, and the competition policy during the transition phase. and this, takes me to the last three pillars i mentioned, which are the outcome of the monetary and financial strategy set by the central bank of argentina over the last years. in fact, the turbulences we are experiencing today has enabled us to see our monetary and financial policy strategy in action : • a prudent and consistent monetary that ensures the equilibrium between supply and demand in the monetary market. • countercyclical financial policies. they include active fx accumulation and management and a sound and well