Although the technical name is surety, in reality it is a fixed term that is stipulated on the stock exchange between private individuals. On the one hand there is the investor who offers pesos or dollars and, on the other, the buyer who, in exchange for the money, in addition to paying a fee, must leave a guaranteeusually bonds or stocks.
This investment alternative generally yields a lower rate than the bank’s fixed term, but has two differences in its favor: it can be done in one day two or as many as desired and has the specific assistance of guarantees.
In this market, which until last week was only private, the banks came in thanks to the permission of the Central Bank, last Thursday. The monetary entity seeks that the increase in the supply of pesos that is being seen does not lower the surety rate and becomes easier and cheaper for the investor who takes those pesos use them to dollarize.
From what we saw in the first days of operation, the banks entered the new market with everything. “The volume of the benchmark stock increased by $40 billion from $170 billion to $210 billion traded per day. The rate increased by about 400 points, from 63 to 67%“, explains Mauro Mazza, researcher at Bull Market Brokers.
“What is worrying is this the binding is now “dirty”. Previously it was by definition the system’s risk-free rate instrument because its counterpart is the private sector and not the public sector. Now banks, which had never operated before, will arbitrate security against BCRA passes, and that’s risky,” he adds.
Traders say there was growth in surety traded volume on Monday. “Large orders have been seen. It is believed that it was a request from financial institutions. The rate has risen to 68% annually, a level which It is no longer useful for banks to arbitrate the net overnight repo rate“explains an analyst.
While retail investors are more used to setting fixed terms, investing apps offer the ability to place money in surety, in exchange for a small fee.
Furthermore, sureties are a good alternative for SMEs to invest funds between what they charge and what they have to pay. Savers can benefit too. For example, last week on Twitter they advised to pay everything by credit card and to secure the pesos “to work”. Even if it’s a few pesos, everything works out at 90% inflation.
NEITHER
Source: Clarin
