He Central Bank lowered interest rates unexpectedly, by five percentage points, and took it from 40% to 35% TNA. It is the first time in five and a half months that it modifies this variable that directly impacts the dollarin the Common Investment Funds (FCI), the fixed term and even in the real economy.
After the dollar’s “financial summer” in the month of October, the entity led by Santiago Bausilli was encouraged by the expectation of another inflationary reduction and decided to move one more piece on the board that reaffirms the Government’s will not to touch the 2% crawling peg at least until the end of the year. This dynamic shows that it will continue until inflation reaches 2.5% monthly.
With a harvest approaching, with a good recovery of reserves, the Government is encouraged by this move thinking that the “summer” of the dollar will continue, the carry trade as well and there will be high returns both in dollar as well as in pesos to avoid any type of “escalation”.
“In this model in which we seek to lower the amount of short-term debt interest and continue using the exchange rate as a nominal anchor, to continue lowering inflation, it is possible that the Central Bank considers a new reduction in the devaluation rate, which also It would be in line with the reduction in interest rates that was made. The main reason why the Central Bank cannot be more aggressive in lowering interest rates is that If yields in pesos are no longer attractive, people would switch to dollars and the exchange gap would increase; which is what happened in May when the policy rate was lowered to 40% and the exchange rate gap increased to 50%,” Econviews explained in a recent report marking the “caution” of the Central Bank on this occasion.
Eco Go economist Lucio Garay Méndez warns Ámbito that the risk of this measure is that the dollar will skyrocket. “Until yesterday, the ‘carry trade’ continued, with the dollar rate that formed the LECAPs in the area of 3-3.5% and the official rate at 2% and financial dollars fell. Now, with less political interest monetary policy, we have to see how the returns are and what investors decide,” he details.
In this same sense, he points out the economist Pablo Ferrari when he maintains that, although “it is not a strong decrease in the monetary policy rate, now, banks are going to lower the yield they pay for fixed-term deposits.” They are going to perform less and the big dilemma is “where the weights that are currently in those instruments are going to go,” he warns.
He points out that, although they can go towards bonds or bills, The small saver is in the dilemma of a fixed term vs. dollar. However, he mentions that with the current rate the yield is almost tied with inflation, although “always from the point of view of the small saver,” he clarifies.
What impact will lowering rates have on the real economy?
The consulting firm Miguel Kieuel He also pointed out that the lowering of the interest rate will impact the real economy, helping to reactivate the economy. “This increase in credit helps reduce the short-term debt that the Treasury (today Lefis and Lecaps) has because the banks sell it to the Central Bank to obtain pesos and be able to increase loans,” he stated.
Lower rates: what happens to FCIs and fixed terms?
City analysts point out that the Government It seeks to make it less attractive for banks to have LEFI and switch to longer-term instruments.
However, the banks will adjust the rate offered for the fixed terms that paid 39% annually until Friday in first-line banks such as Banco Macro and Banco Nación. This week, entities will adjust five points, paying retailers less.
The lower rates of fixed terms will also impact directly in the liquidity mutual funds immediate investment (better known as money market funds), an investment that gained popularity with the arrival of digital wallets. These instruments usually invest in fixed terms, paid accounts and guarantees. Until Friday, the wallets paid 45% annually in the case of Ualá (Uilo) and Naranja X (42%). Starting next week, performance will be adjusted.
Source: Ambito
