“Lowering interest rates in a context of accelerating inflation (more than 20% monthly) is a strategy aimed at liquidate the debt in pesos of the BCRA. Banks are affected because they do not have a simple instrument to beat inflation with the deposits they capture,” explains the master in Finance. Nery Persichini.
The policy of the economic team to resolve liabilities of the Central Bank is to discourage investment in the instruments offered by the organization and migrate towards Treasury debt. In this sense, the entity chaired by Bausili determined that it will not carry out new Leliq tenders and that the current monetary policy instrument will be that of overnight repos, and with a nominal annual rate of 100%. Meanwhile, fixed terms fell to an annual nominal interest rate of 110%.
But The rates offered by the Treasury were far from exceeding the new inflation floor, estimated at 25%. In the first call for bids on Wednesday, Discount Treasury Bills (LEDES), a fixed rate instrument maturing on January 18, were made available. In those letters, $2 billion was awarded, without a second round for having completed the call. The cut-off price was $927, which implied a monthly effective rate of 8.66%. The market understands that the demand exceeded the amount to be bid, which affected the validated performance.
In turn, the Treasury placed $893,000 million in BONCER (indexed to inflation) with maturity on February 14, 2025 and a negative interest rate of 15.95%, and $71,000 million in BONCER were awarded, but with maturity in November 2026. The rate, also negative, is 4.53%.
For Persichini, furthermore, Companies and individuals are also affected by not finding vehicles that beat the price increase.. “A fixed term yields only 9.2% monthly. And there were no attractive variants left on the market either. Almost the entire CER curve yields negative. For example, a bond in March yields -80% in real terms and in one year, -30%,” details the specialist.
Compensation to banks through credit cards
However, the DNU decreed by Milei and made by Federico Sturzenegger seeks to compensate the loss but only to financial entities, with a notable deregulation of the terms and conditions in the use of credit cards. “If the regulations that the Central Bank needs to impose on banks are not business, they are compensated with another business elsewhere. Ultimately, what matters to the bank is that it has not lost profitability overall,” explains the head of the consulting firm EPyCA, Martín Kalos. Among the salient points, the document eliminates the obligation for entities to charge the same commission to all businesses in the same sector, removes the limit established for commissions for the use of credit and debit, and eliminates maximum amounts for the collection of punitive interest.
The question is whether the DNU will effectively remain, along with its modifications in the system, or will be repealed by Congress. Meanwhile, for Kalos, the rate policy for banks must play “another role, because otherwise they will remain very negative for too long.” Financial actors estimate that this is a carry trade impulse, as long as the BCRA maintains the dollar at $800 with a crawl of 2%, in order to add currency settlements.
Source: Ambito
