Meanwhile, on the other hand, a traditional fixed term gave a level of earnings between 78% and 80% per year (taking into account the Effective Annual Rate, TEA). And the dollar registered in 2022 an increase in its price of 72.5% in the Single and Free Exchange Market (MULC), 70.5% in the different financial versions and 66.4% in the blue ($138 in year).
Fixed term UVA vs traditional: this was the dynamic in 2022
“What happens is that the UVA fixed terms updated by the Consumer Price Index (CPI) and, in the second semester, it remained very high, between 6 and 7% per month, which exceeded the traditional fixed term”, explains the investment expert Marcelo Bastante to Ámbito regarding these returns.
And he adds that, although the BCRAto moderate the effects of the rise in the price index, progressively raised interest rates, these movements of the regulator were always a posteriori, with which basically the inflation he beat the fixed term ratewell, he ran from behind
The strong yields that they guaranteed during 2022 caused the total UVA fixed-term stock of the private sector to register an increase of 114.9%going from $164,093 million pesos on January 3 to $352,660 million at the end of the year (includes deposits that must be immobilized until maturity and pre-cancellable).
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The BCRA boosted the instruments in pesos during 2022 to take pressure off the dollar and inflation.
When analyzing the evolution according to the UVA fixed-term rate, it is highlighted that, in the case of deposits not precancellable, the stock began the year at $104,618 million and ended at 150,672 million, after reaching a peak of $209,293 million at the end of July, thus closing the year with a 44% rise. While, in the case of early cancellationwent from $59,475 million to $201,988 million in the year, with an increase of 239.6%.
Undoubtedly, the Communication “A” 7585 from the BCRAwhich forced financial institutions to offer savers the option of making a UVA fixed term through all channels (in branches and electronic platforms), was key to this development, given that, around August of last year, some banks they had stopped accepting these deposits.
As indicated by the economist Christian Buteler, during most of 2022, on average for the year, the UVA fixed term beat the traditional one. But, in November and December, it had its revenge because, while inflation stood at 4.9% and 5.1% respectively, the rate of the instrument was at 6.25%. A) Yes, the fixed term, yielded more than the UVA those two months.
Traditional fixed term vs. UVA: what to do this year?
With this background in mind, what will happen in 2023? Quite predicts that, “by 2023, the expectation is that inflation does not grow”. He points out that the Government’s bet is to achieve a reduction, while the economists’ forecast is that it will remain at the values of 2022, or that it will be slightly reduced. In fact, while the official estimate is that it will be at 60%, the latest inflation forecast for this year, according to the Survey of Market Expectations (REM)is 98.4%.
And, taking into account that the CPI for December will govern the performance of those who decide to place a UVA in the next month, taking into account that the traditional fixed term has positive real returns of more than 1% with respect to inflation, the traditional one appears as a most profitable option for now, at least with the current rate and the level of inflation around these values of 5%.
In Buteler’s words, “the fixed term UVA precancellable it offers good coverage regardless of inflation because it always yields 1% more, but what we are seeing now is that the rate of a traditional fixed term yields more than a UVA”. And he explains that this will continue as long as the BCRA maintains this line of paying positive real rates. “If that happens, in 2023, it will be convenient to do a traditional fixed term“, it states.
However, he explains that this occurs because a lukewarm process of inflation reduction seems to have begun and the rate remained above it. Although he does not believe that this fall is very abrupt, he does not rule out that it will continue and, in this circumstance, he anticipates that “the change in the trend, with a traditional fixed term rate at these levels, will make it a better investment alternative than UVA“While this process of slowdown in inflation.
Similarly, Javier Marcus, manager of Business and International Relations at Southern Trust, points out that, “at this time, there is appetite for fixed rate versus UVA Because inflation is expected to drop. He explains that, in the medium term, for retail investors, it is a very good hedging tool. However, he clarifies that, if inflation does not occur, “the UVA fixed term is an excellent tool in a context of rising prices.”
What will happen to the dollar in 2023?
And finally, what about the dollar? As for the US currency, it is usually the favorite refuge of many Argentines, but last year, it did not do so well and, according to Bastante, “from the assumption of the economic team until November, there was an increase in the monthly devaluation rate of the official, which reached 7%, although, in the last month and a half, it dropped to 5%”. The analyst believes that if the monthly devaluation rate does not increase, he will not let financial dollars escape either.
In fact, in 2022, the official appreciated by 72%, while the MEP it did so by 68%. In an election year like this, the search for cover in the dollar tends to become stronger, but everything would indicate that the Government is going to seek to keep the gap and the exchange rates limited, so it will be necessary to see how this trend continues to determine if, later on, the dollar as an investment recovers attractiveness or not compared to the instruments in pesos. At the moment, it seems that they continue to lose in the comparison.
Source: Ambito
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