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Wednesday, March 22, 2023

The redemption of fixed-term Mutual Funds contracted the monetary aggregate in February

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He private m3 -monetary aggregate comprising the money held by the public, canceling checks and total deposits in pesoscontracted 1.1% in real terms in February compared to the previous month, after a disarmament of fixed terms by the Common Investment Funds (FCI) towards shorter-term instruments, reported this Tuesday, March 7, the Central Bank (BCRA).

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“The fall in fixed-term deposits in pesos from the private sector was concentrated in the wholesale segment and was explained by a rebalancing of the portfolio of the Money Market Mutual Investment Funds (FCI MM), which channeled their funds into deposits at the paid view”, the BCRA pointed out in the February Monthly Monetary Report.

As he explained, the change in composition in a context in which the performance of sight placements for FCI MM “it came to be located at levels similar to those of fixed-term placements”: sight snacks went from yielding 92.2% of the Annual Effective Rate (TEA), while wholesale fixed terms (+ than $20 million) paid a slightly higher TEA of 93.6%, although they imply keeping the money frozen for at least 30 days.

“This gave rise to the fall in their positions in term placements and an increase in remunerated sight deposits (22.4% at constant prices), which in mid-February already represented approximately 65% ​​of their portfolio.“, detailed the monetary authority.

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Although the rest of the companies that also operate in the wholesale segment registered a slight decrease in their holdings in fixed terms, individuals, who mainly operate in the segment of less than $20 million, maintained their holdings without major changes.

He BCRA Directory decided in February to keep the guaranteed minimum interest rates on fixed-term deposits unchanged -the fifth consecutive month without changes- since “the real return on investments in local currency remains in positive territory and the short-term outlook for inflation.”

In this way, the minimum guaranteed rate for placements by individuals for up to an amount of $10 million remained at 75% tna (107.05% apert), while for the rest of the depositors of the financial system the rate of interest persisted at 66.5% na (91.07% ea).

“In total, fixed-term deposits in pesos of the private sector would have recorded a contraction of 6.0% in February at constant prices,” detailed the BCRA.

Source: Ambito

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