In this way, those who bought the blue dollar on February 17 lost $12 per dollar or 5.37%, the one who bought the MEP dollar lost almost $8 pesos per dollar or -3.87%, while the CCL registered the worst performance with a drop of $14 pesos per dollar or -6.8%. The savings dollar, although it did not beat inflation, maintained a better performance (2.39%) as well as the traditional fixed term that managed to outperform the blue dollar.
“The year’s returns race has an undisputed winner: inflation. Therefore, the best returns were obtained through indexed instruments, such as UVA fixed terms. This savings alternative produced a nominal gain of 9.8% in so far in 2022. The other conservative options lagged behind: traditional time deposits earned 8.2% (yield 1.3% negative in real terms), the official dollar advanced 10% and the financial dollar fell 3.1% “he explained Nery Persichini, economist of GMA Capital consulted by Ambit.
In the same line, Victoria Urdangarin of the LCG Consultant explained: “Currently a traditional fixed term is paying a rate of around 3.4% per month, which places them below the general price level, which in January stood at 3.9% and in February at 4, 7%, therefore, if money was placed in this instrument in both months, purchasing power losses were suffered”.
The star investment, the fixed term UVA
According to the Central Bank’s Monthly Monetary Report, UVA-adjustable time deposits registered a monthly jump in their stock of 10.2% in nominal terms and 5.6% in real terms. In the first two months, UVA time deposits grew 8.4% real and 16.9% nominal, surpassing traditional deposits (4.6%) despite the rise in rates that failed to provide coverage in the face of escalating inflation.
“What makes them so attractive at this time is that every month they follow the level of inflation, protecting our money against price increases, although we must bear in mind that the minimum placement term is 90 days, which requires having money immobilized for three months,” added Urdangarin. “In the first two months of the year, the official exchange rate continued to move below the price level, around 2% per month, which also positions the currency with a yield below that observed in the UVA. However, , having foreign currency gives more liquidity in the face of a 3-month placement”.
rate hike
So far in 2022, the Central Bank has raised rates twice. And pending a third, with inflation estimated at 55% according to the latest Survey of Market Expectations, the rises are not enough to be considered positive in real terms.
For Nery Persichini, “the outlook for the coming months does not look encouraging. The strong inertia of prices, the increases scheduled for March, the rate corrections and the acceleration of the crawling peg of the official dollar impose a high floor for inflation in 2022. It is unlikely that the BCRA alone with rate hikes (which are far from the dynamics of the CPI variation) will be able to reverse the film in the short term A more restrictive monetary policy should be accompanied by a comprehensive economic plan of stabilization, something that is not in the agreement with the IMF. indexed financial products would still have an upward trend, although the uncertainty and the difficulty in rebuilding net reserves could give vitamins to free exchange rates and put pressure on the official“.
Finally, Victoria Urdangarin assures that what is coming is a greater speed of devaluation and additional rate hikes. “We do not expect this latest policy to impact traditional retail placements because the adjustment that is applied we hope will not be enough to match yields with CER-adjusted positions in yield terms.”
Regarding the dollar, he concluded: “the devaluation rate will continue to be at least higher than last year because the agreement with the fund conditions you to maintain a real exchange rate at the same value as at the end of 2021 and if the general prices of the economy that forces you to increase the value of the nominal exchange rate. this adjustment rate, related to imported inflation rates from the rest of the world, will be below the internal price adjustment. In short, at least for the next few months, the price growth rate will continue to be higher than these two variables.”
Source: Ambito
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