After National Institute of Statistics and Censuses (INDEC) would reveal the inflation rate December, which marked 25.5%, this was expected The Central Bank (BCRA) will make a decision on the interest rate offered on fixed terms. The resolution, which was to maintain it, ratified the intention to maintain it negative rate depending on the economic policy carried out by the Minister of Economy, Luis Caputo.
Then two doubts arise for savers: for those who have invested in a traditional fixed term, the unknown is how much they will lose due to the advance of inflation. For those who opted for UVA, the question is whether they will be profitable in the future taking into account the parallel increase in dollars.
Something important to remember is that the Fixed-term UVA has a minimum period of permanence of funds for 180 days (6 months) doubling the previous minimum period.
When calculating the performance of the fixed-term UVA it is necessary to take into account the following information: this instrument expressed in one unit (the UVA) captures the evolution of domestic prices with a 45 day lag. In case inflation is expected to decrease from month to month, past inflation is captured, which makes the tool profitable with respect to the evolution of the CPI.
Fixed-term UVA: what will be the performance for the next few months
For the next 4 months, those who already have a fixed UVA deadline from before the new regulation (before December 28th) or those who inserted it in the month of January (when it was already in force), the first 4 months will be able to do the following performance, based on Market Expectations Survey (REM):
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“Since February, the potential of Fixed-term UVA. Not only is it a winner in relative terms compared to the traditional fixed term, but also compared to the CPI growth expectations, even the most pessimistic forecasts on the upward trend of retail prices”, explained Andrés Méndez, director of the AMF, in a work prepared for Scope.
At the same time, he stated that starting from February, the slowdown in the growth rate of the CPI which, however, will easily exceed the minimum rate for time deposits set by the Central Bank. “If it is not changed upward (as it was not this month), the traditional 30-day deposit will be a comfortable loser relative to price action.”
With this report he proves it Those who entered a UVA fixed term will be the big winners. He then said that by taking the UVA deposit, inflation in the weeks prior to the placement, a downward trend in prices in the economy month after month, “would generate greater income from this investment than the evolution of the CPI.” .
Fixed Term vs Dollar: What Role Does the Exchange Rate Play in Your Investment Decision?
According to the economist Christian Butler, in a month the The MEP dollar beat the traditional fixed maturity. Meanwhile, regarding inflation, the MEP stood slightly above the price indicator.
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Méndez added that expectations play a predominant role: it is what is expected prices nominally grow at a rate higher than the peso/dollar parity.
“Although this circumstance considers a broader horizon than these first months of the year, reality indicates that during the second quarter of the year, The supply of agricultural currency increases seasonally due to the liquidation of a considerable portion of the gross harvest. Consequently, like the March signals begin to appear that reflect those of prices in the following weeks They will be less ‘nervous’ compared to those in force up to then”.
In this way he analyzed that a the blue dollar (or other alternative) at 2,200 dollars would be neutralized A possible increase in UVA fixed terms is expected in the next 90 days.
“According to exchange rate expectations contained in the REM median ($1,100/u$ for next April, assuming a BCRA regulated variant), this would imply that the “gap” would have reached 100% again. Considering that such a situation is not expected, much less for the second quarter of the year, it can be deduced that the UVA fixed term will beat not only its traditional brother, but also the dollar in its free meanings and to the evolution of internal prices”.
2024-01-18 23:19:23
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