The uncertainty remains at the center of the scene Argentine politics and economy. This is mainly due to the lack of just over two weeks until the runoff which will define if the next president be Sergio Massa either Javier Milei, each one with a very different economic project. In that framework, the savers looking for what to invest in for protect your savings given the high level of inflation.
Latest Consumer Price Index (CPI) published by the National Institute of Statistics and Censuses (INDEC)indicated that, in September, inflation was 12.7%slightly above the 12.4% in August.
After knowing this information, the Central Bank (BCRA) decided to raise 15 percentage points (or 1,500 basis points) the interest rate reference of the traditional fixed term. In that way, the Annual Nominal Rate (TNA) became of the 133% and the Annual Effective Rate (TEA) was located in a 253%.
With this measure, the monetary entity sought to encourage savers to leave their pesos in Fixed deadlines and, thus, alleviate the pressure on parallel dollars. But, in the middle, on October 22, the first round of elections and the economy continues to digest its impact, while preparing for the defining return of the November 19th. Therefore, in this new scenario, it remains to know if appropriate invest or not in a fixed term.
Fixed term vs. inflation: what is convenient
He traditional fixed termwith the last modification of BCRA rates, began to have a monthly effective yield (TEM) of the eleven%closest to the data of September inflation (12.7%) that he 9.7% that was previously offered.
He November 13 The official number of the inflation of the month of October. For their part, most of the private consultants indicate a increase around the 10%. These are the parameters that must be analyzed to define whether the fixed term is convenient or not.
Mateo ReschiniSenior Research Analyst at Inviu, considered in dialogue with Ambit that “despite the interest rates they went up and They are much higher than at other timeshe risk of falling below inflation is still not negligible“.
He also said that, for that reason, there are instruments in bag how are the CER titleswhich are lowering rates and shorter ones, such as Letterswhat are you offering negative real rate. “This reflects that “Investors prefer to invest at a negative rate rather than in products with a regulated nominal rate (such as fixed terms).”
What he points out is mainly due to a question of deadlines. And the first option has a greater possibility of quick liquidity and the second requires waiting at least 30 days. “So everything in the short term is performing below inflation and expectations,” he explained.
As opposed, Camilo Tiscornia, director of C&T Economic Advisors, said that “the rate set by the BCRA has the potential to be higher than the inflation expected for October.” The economist estimated that the CPI will be about 10% against one fixed term rate of 11% monthly.
For example, at the current rate, if a person makes a fixed term by 30 days with $100,000at the end of that period you will receive around $10,931.51which will be added to the initial capital, so at the end of the month you will have about $110,931.51.
He BCRA It has been updating the rate periodically and could continue on that path, although it is not certain. “I imagine that, with the result achieved by Massa, surely The Government will try to avoid drastic adjustments and most likely the rate will end up being strongly positive in relation to prices“he added in this regard.
Inflation vs. fixed term: how that relationship can evolve
The actual uncertainty economics focuses on big difference what is between the economic proposals of both candidates. In that sense, depending on which one prevails in the November runoff, it could probably change the relationship between fixed term and inflation.
Tiscornia He predicted that, “we will surely have more inflation in December because there will be some exchange rate correction,” after the elections.
Then, depending on the outcome of the elections, we will see the economic plan that will be imposed. In a government of Javier Mileiexplains the director of C&T Economic Advisors, interest rates could probably be higherbecause it is possible that they implement a stronger anti-inflationary plan.
On the other hand, “as history shows, the governments of Massa’s political space, in general, They don’t like raising the interest rate. Therefore, I imagine that, if he wins the elections and a rate increase is ordered, is it going to be very contained or Maybe they don’t even want to modify it.”he assumed.
Therefore, it could be concluded that, for conservative investorsfixed deadlines could be a good investment strategy for his simplicity and because, despite remaining below the latest inflation data, it could exceed it this month. However, for riskiest investorsin a framework of so much uncertaintythe term of this instrument may become a characteristic that tips the balance for other options.
Source: Ambito
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