On Friday, inflation data of 7.7% for the month of March was released, above what was expected by most analysts. Within this framework, savers await the decision that the Government will make in relation to interest rates. But how much can you earn now with a small amount?
On Friday it was known inflation data of 7.7% for the month of March, above what was expected by most analysts. Within this framework, savers await the decision that the Government will make in relation to the interest rates given that the monthly yield of the fixed term is located at 6.14%, 1.3 percentage points behind the evolution of prices.
Maintaining a positive real rate is one of the points agreed between Argentina and the International Monetary Fund (IMF) in a latest agreement. In its latest statement, the agency ratified the need for Argentina to place interest rates above inflation.
In the first instance, it is worth remembering that the fixed term interest remains at 78% per year. Investments of this type are safe and for conservative profiles, despite being below inflation.
The effective annual rate, that is to say, the one that records the gains month by month within a year, is 107.5%, above the interannual variation of inflation in March, the last available record, which was 104 ,3. Thus, with a rate of 78%, to earn $30,000 by placing 30 days, you have to invest $470,000 ($1,200).
Fixed term: should it be renewed?
The Economist Cristian Buteler considers that “it is difficult to know whether or not to renew a fixed term right now because it depends on multiple variables:
- what does the person save for,
- for how long can you leave the money immobilized,
- What knowledge do you have of the world of investments and the financial system and
- whether or not they have access to the purchase of the official dollar”.
However, it points out that, in the first instance, “what is convenient is wait to see if the BCRA modifies the fixed term rate ”. If it does it at an interesting level and, for example, takes it above 80%, the fixed term traditional may be a good option, especially considering that analysts forecast that monthly inflation will drop in April.
And it is that, Ignacio Zorzoli, director of Finance of the Center for Economic Studies Argentina XXI (CEEAXXI)points out that “one of the main advantages of fixed term it is that it is an instrument that the average Argentine investor knows and knows how to handle” and, with the mere possibility of having an account opened in a bank, one can set up and access that instrument.
Source: Ambito
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