The most conservative savers see how household income has plummeted in recent months. traditional fixed termwhile monthly inflation is also decreasing, something that also affects a lower profit for placements GRAPE. And to this is added the rise in the price of the dollar in recent weeks, which reduces its attractiveness. In summary, the question that investors in these deposits ask themselves is how much they can earn, with current conditions, in the next semester.
It should be remembered that the traditional fixed term has as period minimum reserve requirement of 30 days, and provides an annual nominal rate (TNA) since last May 14 of 30%. That is, it provides a utility close to 2.47% monthly for retail deposits of natural persons.
A level that is almost the half of the current inflationbecause different economists maintain that in May it was ranked below 5%and that in the coming months it would remain around that level.
A fact that will affect the performance of the UVA fixed term, which is the one that adjusts based on the prices of the economy, and which has a period of Minimum reserve requirement for funds of 180 days.
It positive for savers is that this instrument It takes into consideration the inflation records of the 45 days prior to placement, so in a context of continuous decline in prices, a higher index (income) is being transferred to the current one.
Specifically, in the first 5 months of 2024, a UVA fixed term returned around 110% of TNA, more than double the income accumulated in pesos from a traditional placement.
The UVA fixed term is projected to yield almost twice as much as the traditional fixed term in the coming months.
Traditional fixed term vs UVA fixed term
In short, the UVA fixed term continues to look like the most winning instrument, despite the expected decline in inflation.
For example, for June a traditional deposit will provide a profit of 2.66%while, by drag, the UVA will offer 6.89%.
While, in July it would be 2.7% for the traditional fixed termwhile a placement UVA would grant around 4.81%.
And to Augustif the reference rate is not modified, would be kept for the traditional deposit the last percentage, while the fixed term that adjusts Due to inflation you would pay about 4.73%.
In figures, the Survey of Market Expectations (REM) published at the beginning of the month, in which the Central Bank surveyed some 37 economists from private consulting firms and banks, considers that the consumer price index (CPI) can be from 5.5% for June and 5.5% for July.
Only in the following months could it be milder, because it is expected to August let it go back to 5.2% and to September to 5.3%.
Even the best pollsters establish a Most optimistic median (lower numbers) for the coming months.
The UVA fixed term yields according to inflation measured from 45 days before placement, so now the income will stabilize with the price index.
Fixed deadline for the next few months
According to different analysts, Inflation would already be touching a floor at which it will remain for the next few months, so the income of a UVA fixed term may stabilize.
“While the best REM forecasters They hope that in the next months retail prices pivot around a 4.5% monthly increase, the monetary policy strategy followed by the Central Bank seems to remain immobile and will not give better returns in the traditional fixed terms that are seen in the first days of June. That is, a monthly effective rate (TEM) that averages 2.66%, and which is very far from inflationary expectations,” he summarizes to iProfesional. Andres Mendezdirector of AMF Economía.
This poor performance, according to this expert, is being reflected in a disincentive for savers because the placements being made in the system were leveled off. It is that the Traditional fixed terms expand nominally only 0.8% in the month in the volume of deposits.
“It is a percentage that indicates that They do not even maintain vegetative growth. In other words, traditional fixed-term holders direct a portion of their funds to other options. Which is it? On the one hand, they remain liquid and give up profitability in exchange for the immediate availability of their funds. Or, they go to the exchange market. Something that was observed in the recent rise in the price of the free dollar. It is evident that current rates do not satisfy peso holders,” Méndez reflects.
And the UVA fixed term?
On the side of UVA fixed termthe attraction it presents is that it provides coverage against advance of inflationdespite the fact that its performance decreases in line with said indicator.
“Everything indicates that the UVA placements now are not turning out to be so attractive after the excellent performance achieved until last May. Because? Although they outperform traditional fixed terms in terms of performance, “June constitutes the last month in which ‘they make a difference'”says Mendez.
According to economists, inflation may stabilize in the coming months at around 5% monthly, so the UVA fixed term will stabilize at that figure.
It is that, according to projections, starting in July, or mid-June, when they begin to adjust for the CPI from last May, “its performance will be aligned almost on par with the inflationary standard.”
Specifically, if the CPI stabilizes at the same monthly rate of increase as in previous periods, the fixed term UVA loses much of its appeal that characterized it from the beginning of 2024, which was to pay more than inflation due to the carryover of previous data, although it still beats the traditional version.
Now, for what’s next, This scenario may be modified if the Central Bank repositions the monetary policy rate upwards, which currently stands at 40% of TNA, although the traditional fixed term pays an average of 30% of TNA..
“He another factor that can modify the current moment is that he BCRA continues with the gradual decrease in monthly inflation. Although these two possible assumptions still are not perceived by the market”, concludes Mendez.
For now, although yields have fallen, the UVA fixed term continues to significantly outperform the traditional fixed term.–
