Goodbye fixed term deposits? With inflation on the rise, what is the best option to protect your pesos?

It happens that, in the first tender of debt in pesos in September, the portfolio in charge of Luis Caputo placed $6.99 billion, just enough to “roll” this week’s maturities. However, to achieve this, the economic team had to validate a rate increase with respect to what it offered in the previous auction, something that also applies to secondary market yields.

In addition, it also placed $995,916 million in a Lecap in April, $717,552 million in one in May and $828,692 million in one in September 2025. However, the data that draws the market’s attention is that Caputo has no choice but to validate slightly higher returns for investors. Thus, for Lecaps, the effective monthly rate (TEM) was 3.75% in December; 3.9% in February, March and April; and 3.95% in May and September.

Lecaps vs. Fixed term

It should be remembered that in the penultimate tender, Caputo’s team paid, for example, 3.78% (monthly cash, TEM) for a February bill and 3.88% for one in August 2025. Thus, after the rebound in the latest inflation data, which reflected an acceleration with respect to the figure reported the previous month (4%), The question is what should I invest the pesos in?

Leo Anzalonedirector of the Center for Political and Economic Studies (CEPEC), explains in dialogue with Scope Since the appearance of Lecaps on the investment horizon, they generate higher returns than fixed terms. And he emphasizes: “Much better returns than fixed terms.”

Now, as explained above, the tender this Wednesday was validated considerably higher rates than the market was giving. For Anzalone, this will cause the banks to can give a little more returns to capture deposits.

It also indicates that banks are in urgent need of liquiditytherefore, the market may witness an effort by financial institutions to make the rate of placements in pesos competitive. However, Anzalone highlights that the increase in the yield of the Lecaps “makes them even more tempting, even if they remain below inflation”. As he rightly points out, “There are no instruments in pesos for conservative profiles that perform better than Lecap”.

Appetite for short instruments

In dialogue with this medium, the financial analyst Leandro Monnittolamaintains that the bidding this Wednesday left in evidence the appetite for the short end of the curvesince the “rollover” of this week’s maturity was total and more than half was placed in the first three letters, that is, from December to March 2025.

For the strategist, “the rollover was prioritized and a premium was paid slightly higher than the previous auctionbut more attractive compared to the rates of the Lecaps listed on the secondary market,” he analyses. And he highlights that, taking into account that the banks are the ones that hold 70% of the bills, “it was expected that they would reduce their exposure and supply private credit, but that was not the case.”

For Monnittola, Lecaps extend their stardom by being much more attractive compared to traditional fixed-term deposits. And he maintains that he is interested in analyzing short-term ones, for two reasons:

• Although August inflation was higher than expected, we estimate that the impact of the reduction of the PAIS tax generate a reduction in the coming months. If rates tend to converge, hedging is more efficient.
• As for the exchange rate, they believe that the Government will continue to maintain these values. The “carry trade” strategy continues.

Strategy to follow

In the rate war, the big winner is undisputed. Lecaps are more important than fixed-term deposits, which, despite the fact that there may be some interest on the part of banks in making the yield on peso deposits more attractive, will continue to be below the inflation projected for the coming months, while bills will tend to converge with this figure.

Thus, since Delphos Investmentthey argue that when comparing the Lecap S29G5 As an instrument in pesos with the 2035 global bond (GD35) as an investment in hard currency, the direct yield of the peso bill is 55%. In an optimistic scenario, where the Contado con Liquidación (CCL) converges to the official exchange rate and the price for the currency projected in the Rofex materializes, the CCL would reach a value of $1,390, which would imply a return of 40% for the Lecap. On the other hand, if the gap with the official rate is reduced to 20%, the return would be 16%.

Indicates that for the GD35 to match these returns, its one-year Internal Rate of Return (IRR) should be 14.5% in the most optimistic scenario and 19% in a scenario with a 20% gap, which means that it should remain close to current levels. In the most favourable scenario for the Lecap, with a gap of 0%, the country risk would have to fall slightly below 1,200 basis points within a year. This does not seem unattainable, since the country risk was lower in April.

With the above in mind, Delphos maintains that, for investors with a more cautious profile who seek to incorporate sovereign risk into their portfolio, “It might be advisable to take profits in peso bills or bonds and increase the weighting in global ones“He explains that these are lagging behind stocks and offer greater protection against exchange rate volatility.

Anzalone, for his part, indicates that, for those investors who like a little more risk, there are some Argentine stocks that have a very good outlook. He maintains that CEPEC has not cleared up the doubt about devaluation pressure for the medium term and there, the Cedears and some Negotiable Obligations (ONs) are very valuable.

Instruments to bet on

Finally Maximilian Donzellistrategy manager at a well-known broker in the city, suggests that, given the rise in inflation, Having uninvested pesos generates large-scale losses in purchasing powerso positioning yourself in Lecaps and CER assets (adjustable for inflation) represents the best option to protect value and bet on low-risk fixed-income assets and in the event of a possible “exchange rate policy shift in the medium term“, as Anzalone suggests.

Donzelli recommends the T4X4 Bonus (short term). Inflation-adjusted bond (CER) with full maturity on October 14, 2024. This bond trades with considerable volume and currently has a monthly yield of CER, making it an excellent option to preserve capital against inflation and yield the same as inflation. In a context in which the escalation of prices is slowing, this bond will allow the investor to obtain returns based on past inflation and can serve as a hedge in case inflation does not fall as quickly as the market expects. The projected yield of this bond is 3.6% effective monthly. This implies that, if an investment of $100,000 is made, at maturity we will obtain $103,800.

Lecap S31M5 – 200 days (Medium Term): This is the bill that matures on March 31, 2025 and yields a rate of 3.8% per month, which Donzelli estimates may be attractive in the short term to maintain the purchasing power of savings and, especially, to seek to benefit from a decrease in inflation in the coming months. In the case of investing $100,000 in this instrument, at maturity $128,463 will be obtained. “This alternative far exceeds the yield of the fixed term,” he indicates.

CER Rate – TX26 Bond – 789 days (Long Term): National Treasury bond that adjusts capital by CER TX26 with maturity on November 9, 2026. It begins to pay semiannual amortizations starting this year. This alternative exceeds the performance of the fixed term. “This bond operates with a considerable volume and to date has an annual yield of CER+8%, which makes it an excellent option to preserve capital against inflation, maintaining a yield above it,” concludes Donzelli.