In mid-May, the Central Bank raised interest rates for the third consecutive month due to the sharp rise in inflation of 8.4% in April. Since then, the reference rate has stood at 97% (TNA), 6pp more than in April, which is consistent with an effective annual rate of 154%. In monthly terms it is equivalent to a return of 8%.
Within this framework and waiting for new inflation data to be released the following week, a market analysis focused on the performance of the instrument most used to preserve savings, the fixed term. And, at the same time, it was compared to the dollar. But who could have won the price race in May?
Traditional fixed term or UVA?
According to a recent LCG report, the traditional fixed term emulates the performance of Leliqs. Based on its own projection of inflation of around 8% per month for the month of May, the consultancy assures that a fixed term UVA (adjusted for inflation with a maturity of three months) would yield around 25% in a term consistent with a 7.8% monthly inflation. In this sense, it exceeds wholesale placements and is close to matching the performance of the traditional fixed term, “with the difference that it provides coverage in the event of spiraling inflation,” they say.
and the dollar?
Regarding the dollar, the Central Bank began the month by moving the official exchange rate at an average rate of 7.8% per month (151% effective per year). However, during May the speed of devaluation averaged 7% per month, so that it was below fixed-term placements.
Regarding the performance of free dollars, parallel dollars moderated the rise but marked significant increases. The MEP dollar rose 8% on average during May, the blue 13%. The CCL, on the other hand, became only 6% more expensive in the month. “In this way, they all remained below the inflation of May)”, They stated from LCG.
So, What instrument may have won the race in May?
The price of food climbed 3.5% in the last week of May, an acceleration of 3.1 points in relation to the previous week, according to a survey by LCG Consultora. Thus, the LCG food and beverage index presented monthly inflation of 8% average in the last 4 weeks and 8.9% end to end in the same period.
If this prediction comes to pass, the performance of the traditional fixed term and the MEP would be practically even. If it becomes higher, it will be the UVA fixed term that could win the price race, just like the blue.
Source: Ambito
