The deposits to traditional fixed term fell 22.3% in real terms in January, which shows the savers’ decision to withdraw their money from the banks because the interest rate paid was well below inflation.
This was revealed by the monthly Bank Report published by the Central Bank of the Argentine Republic (BCRA). The savers’ decision is the result of the fact that during January Banks paid an interest rate close to 9%, while inflation was 20%.
Faced with the obvious loss of purchasing power, the owners of the fixed-term loans decided to withdraw their deposits and divert them towards other investments.
Fixed term: what happened to the UVA
One of these shelter tools were the UVA fixed termswhich guarantee a return equal to inflation plus a slight interest.
According to the BCRA report They increased 27.3% in real terms during the period (discounting inflation).
The UVA fixed term They had a minimum period of 90 days, but given this migration, Banco CentraHe extended it to 180 days. The measure was at the request of the banks, which argued that they did not have financial tools to respond to the returns offered by UVA fixed-term loans. Even in more than one meeting they even asked that they be eliminated.
This process of interest rate below inflation is what causes the “liquefaction” of savings of individuals and families, who in this way at the end of each month suffer from the loss of purchasing power of their savings.
When analyzing the total deposits of the private sector, a 12.1% reduction compared to the end of 2023. The fall is the result of a 12.8% decrease in demand deposits and 8.9% in time deposits (fixed-term deposits are included within this group).
In the year-on-year comparison, the real balance of total private deposits in pesos accumulated a drop of 31.1%.
Source: Ambito
