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Fixed-term deposits fell by more than 51% in June due to the drop in rates

Fixed-term deposits fell by more than 51% in June due to the drop in rates
Fixed-term deposits fell by more than 51% in June due to the drop in rates

In recent months, the Fixed deadlines They became one of the worst options to invest In this context, due to the sharp rate cuts in the first months of the year that brought down yields. Now, they are not only losing against the dollar and inflation, but also against other currencies. financial instruments.

According to official data from the Central bank, According to the LCG consultancy, fixed-term deposits fell by 7.6% in real terms and showed their worst year-on-year drop of 51.7%.

In contrast, the demand deposits maintained a growth trend of 5.1% monthly in real terms but decelerated compared to May (9.6% m/m in real terms). In annual terms they remain in negative territory (24.5%). On the other hand, Interest-bearing deposits in FCI achieved some recovery after two months of monthly decline with a real monthly growth of 4.6%. In annual terms, it is the only one to show a real increase of 28.6%.

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Paid accounts at FCI also fell

Finally, dollar deposits increased 1.2% monthly measured at the end of the month (+US$207 million) totaling 17.9 billion.

According to LCG, “the fall in term deposits was linked to inflation, which fell 15% monthly in real terms in June. They currently represent 0.5% of total term deposits (vs. 1.3% a year ago).” According to the consultancy, a process of ““bank disintermediation” for the remainder of 2024.

What can boost fixed-term deposits?

According to LCG analysis, a Further decline in inflation and a return to positive real rates As requested by the IMF, negative rates may be abandoned in order to encourage access to term deposits, which remain at a lower level than last year. On the other hand, interest-bearing deposits by FCI fell due to the drop in the rate of return.

How much would the rate have to rise to improve the performance of fixed-term deposits?

In mid-May, after a drop in inflation, the Central Bank lowered the rate and placed it at 40% per year, so that the Fixed terms are offering an average of 31% annual in banks. This left a yield for fixed terms of 2.5% TEM. Meanwhile, the inflationaccording to various economists, is being placed in a floor above 4% monthlyMeanwhile he dollar climbed 11% in June and in the first week of July it already advanced 4%.

This rate cut was the sixth during Santiago Bausilli’s administration and had an impact on the rise of parallel dollars. Currently, an instrument that is performing better than the fixed term is the Lecaps, which are located at around 4.2%.

According to analysts’ calculations, for the rate to become attractive again should be raised to 60% APR.

Source: Ambito

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