Although the Central Bank surprised the market in the first part of March with a sharp decline in interest rateswhich reduced the yield of all peso placements on the market last month for the first time after seven months of consecutive declines The stock of fixed terms has started to grow again.
Last month the organization removed the minimum floor of the rates that banks could charge for fixed terms, which prompted entities to do so cut rates to an average of 70%. Despite this, the stock of these placements increased by a real monthly 5.6% in March, driven to a greater extent by an increase in wholesale fixed terms.
The recovery of this stock occurred at a time when the dollar remains firm and the market is beginning to believe the statements of president Javier Milei according to which There is no need to validate a new exchange rate rise in the short term.
However, in a year-on-year comparison, the “picture” shown by these bank placements shows the outflow of deposits that occurred in the latter part of 2023 and the effect of the liquefaction of pesos that this management has had to face in the last four years. months. : the stock of fixed terms at the end of March it was 58.3% lower in real terms compared to the same month a year ago.
Although the drop in rates operated by the Central Bank has strongly influenced the returns that virtual portfolios offer for balances invested in mutual funds, in the last part of the month there was an increase in the volumes that they manage, especially the so-called T funds. +0 .
As explained by the organization in its latest Monthly Monetary Report: “In the last weeks of the month, an increase in the assets of money market FCIs was observed, which continued the process of portfolio reorganization, which began in February, in favor of participations. to the detriment of interest-bearing sight deposits. From a statistical point of view, this has given rise to an increase in fixed-term placements by financial service providers, whose main players are the MM FCIs. Other legal entities have also recorded an expansion into forward placements, while private individuals have reduced their holdings.
Another of the changes introduced by Central last month was the minimum extension of inflation-linked terms from three to six months, after a claim from the banking sector that seeks to discourage these placements. As a result, this line contracted by 6.8% in real terms in March. “Inflation-linked deposits with a minimum tenor of 180 days lose attractiveness due to the need for liquidity in a year with high uncertainty,” they told the LCG.
Now the Central Bank is analyzing a new rate cut and the market speculates that it could reach 10 percentage points. This means the economy’s policy rate could hover around 70% per year, which would further depress fixed-term yields.
Looking ahead, the City expects the migration from bank fixed deposits to virtual wallet funds to continue, in a market where uncertainty and a preference for liquidity remain. “Despite the notable slowdown, inflation continues at high levels, which discourages unremunerated money holding. For this reason, by 2024, demand deposits are expected to continue to decline in real terms, and will gradually migrate towards the demand paid.accounts such as money market funds or short-term fixed deposits,” they said in LCG.
In contrast, dollar deposits increased last month, accompanied by increased credit supply for the export sector. “On the one hand, private sector deposits increased in the month by 456 million dollars and closed March with a balance of 16,904 million dollars. For their part, the balance of loans to the private sector increased by 1,196 million dollars . closed the month at $4,928 million,” underlines the official report.
Source: Clarin
