Fixed deadlines: placements recover lost ground and expose the electoral result

With the victory of Sergio Massapresidential candidate for Union for the Homelandon October 22, the deposits to fixed term began to recover the ground lost in the prior election.

In October, according to private sector sources consulted by Ambitplacements fell more than 12% compared to the previous month, but income rose to money market funds and remunerated wallets in a. Now, the rebound in traditional fixed terms may find its basis in the update of the interest rate by the Central Bank, which brought the rate from a TEA of one 209.45% to 254.82% at the beginning of that month.

The perfect storm for term deposits in pesos happened between the September inflation datawhich was 12.7%, which prompted the increase in the monetary policy rate by the BCRA, and the words of the presidential candidate for La Libertad Avanza, Javier Milei, who responded “Never in pesos” when asked what he would recommend to a saver who has a fixed term due. “The peso is the currency issued by the Argentine politician and therefore cannot even be worth excrement, because that garbage is not even useful for fertilizer.”.

That was at the beginning of October, exactly a month ago, a few days before the first electoral round, it was at that moment when, according to BCRA datafixed terms reached a minimum (on October 20) of $12.4 billion. With data from the monetary entity as of November 2, the latest data available, fixed terms are almost a billion above ($13.3).

This could show that, with Massa’s victory, the idea of ​​a dollarization of the economy and traditional fixed-term placements once again captured the attention of savers.

Fixed deadlines: how the dynamics will continue in November

And, as the economist explains well Federico Glustein“what is observed is that the pesos remain open to short opportunities, even losing in real terms at the monthly level,” and warns: “This trend will continue in November, because the instability of the exchange market, although relatively calm, is striking and can motivate a lawsuit“.

As a report by the consulting firm LCG points out, the behavior of fixed terms is the “lowest in recent years.” According to the document, retail placements fell by 12.6% in the tenth month of the year, in a context of high nominal value that “would seem to be limiting the fall in demand deposits, where the management of physical money becomes cumbersome“. While the money markets grew by 14% (real) during October, according to LCG.

Likewise, economist Elena Alonso explains to this medium that those who migrated to the MEP dollar in October had “much more performance than the one who made a fixed term“. However, it indicates that, “looking ahead to November 19, surely the fixed term beats the dollar“But, everything can change after 19-N, warns Alonso, while recommending by then to be covered by instruments that adjust by CER or by dollar (Dollar Linked).

Finally, it must be taken into account that the traditional fixed term, with the latest rate modificationbegan to have a monthly effective yield (TEM) of 11%, closer to the September inflation figure (12.7%) than the 9.7% that was previously offered.

So things are, On November 13, the official inflation number will be known for the month of October, which, most private consulting firms project an increase of around 10%. Numbers that must be taken into account when defining whether or not a fixed term is appropriate. And as the financial analyst warns, Christian ButlerWe’ll have to see what happens next week, “which is just the week before the elections“.