So this is the impact. If we have if the central bank, together with the Minister of Finance, the CMM and the Minister of Planning, if they don’t find out the solution that puts everything together. And the end, the end of the day, who is getting benefit of that. It’s not the issuers, it’s not acquirers, it’s the consumer, it’s the merchant. This is what we defend. And I want to see a discussion that’s very technical, that the rates that are being practiced on the anticipation are clear, you can go to any website of any motion. If any acquiring company, you will see there the level of fees that are being charged for the SMEs. So the narrative is very dangerous. And this is what we have. So for me, it’s much more a political issue than a technical issue now.
And everybody needs to understand that we need to — we need to find out a solution that is good for the country. And we have to plan a transition. At the end if we don’t do that in 90 days, you’re right, we will have this cap that was approved in Congress it will take the rates a little bit though, it won’t solve any of the issues that we have today. The clients that pays to be the same, they still going to have to subsidize between publics, we won’t be able to increase the portfolio and finance the consumption more than we do. And we will have to cut a lot of clients out of the market, because at this level of rate, we won’t be able to make this sustainable in the long term. So this is the impact that this is simple, but this is not the right way of making the right decisions.
So for a complex problem a simple decision is not the most effective. And I think the central bank has all the tools has the technical teams. And they will have to come up to a solution that is good for the country that is sustainable. And we don’t advocate that us as a bank to maintain or to preserve our business lines. And why is that, because we are the number one issuer and the number one acquiring company in the market, we are in both businesses. So there is no conflict. There is no conflict at all, we will be the most impact in either side. So it’s not a matter of conflict, it’s a matter of delivering to the market, what is better to the market in the long term. And we believe that informations are available, you made that that briefing very clear.
And I think the technical people knows that. Let’s see what is the appetite to get or to make this discussion happens.
Jorge Kuri : Thank you very much.
Renato Lulia : Thanks, Milton. Next question, [Indiscernible] Bank of America.
Unidentified Analyst: Good morning, everyone, congratulations on the results. Two questions. I lost his audio. You lost his audio?
Renato Lulia : I can hear you. Milton, can you hear me? No?
Unidentified Analyst: Okay, two questions. At the beginning of the year, you do a hedge of the capital for real for the exchange rate, about BRL2 billion at the beginning of the year. Given the sale of the assets of Argentina can we expect those costs to be lower next year? And can you give me the magnitude of that reduction? Second question, Milton, I believe it’s very clear that the appetite of the bank to give credit is improving, given the improvements on the delinquency, but I was itching to hear from you. How do you see the demand of credit? Do you see the appetite improving with the economy with the reduction of the interest rates? Can you tell us on the side of the demand more stuff?
Milton Filho: Well, thank you. Objectively speaking, Argentina, in the same way that it had a negative CTA, for the cost of the hedge of the index would bring a benefit and not something bad, because of the difference in the interest rate, what will — what caused the problem to carry over this asset which was the cost of result with the exchange rate in the Argentina. When I do the hedge of the capital index, the carry of that, of that Argentinian peso is positive in regards to the real. So in the last quarter, about BRL70 million so if we remove the two months would have been the impact — positive impact that the cost of hedge. So we see on the long term, we have improved our way of doing the hedge, using well, using the hedge of the strong currencies, while the correlation with the real is very close to the other countries in Latin America.
We have a big emphasis on euro and the dollar because there is not a big, it’s not a good correlation. And that helps with the hedge and the interest rate that is dropping, that helps the cost of the hedge. That’s why we see a reduction over the last few months. Argentina for that end, above all the impact there was a positive impact. It has while the carry of the currency was in favor in regards to the cost of hedge. That’s the explanation. Looking ahead to the portfolio, we’ve seen an increase in the demand. I’ve shown you, the origination of the big companies increased over the last quarter, the capital market is coming back. So we see a market that is more active the company’s anticipating dropping the interest rate. There are more positive prospective GDP growing this year.
