This Sunday the presidential election will be held in the second round between Javier Milei and Sergio Massa. What will happen to savers’ favorite instrument next?
Since October 12, the traditional fixed term It yields an Annual Nominal Rate of 133%, which is equivalent to an effective monthly yield of 11%. In October, this instrument beat inflation, which, according to the Consumer Price Index (CPI) was 8.3%, but this Sunday comes a key election for Argentina, the runoff is between Sergio Massa and Javier Milei. And a big doubt is what will happen after that day with the rate.
He Central Bank (BCRA) is the one that sets the performance of these instrumentswhich are among the most chosen by savers and investors, after the October inflation data, which was known this Monday, did not make any changes in that index and it remained real positive by almost three percentage points with respect to the price dynamics of the economies.
The fixed deadline: what can happen depending on who wins the runoff
However, in November, analysts predict a price escalation and may return to double digits again. Therefore, it is likely that If Massa wins the election this Sunday, consider a somewhat higher interest rate to beat inflation for the second consecutive month.
If Milei wins, the outlook is less clear because it is expected that there will be radical changes in economic and monetary policy. The libertarian spoke of dollarization, the need for a higher dollar and even the end of the Central Bank. Consequently, in this scenario, it is expected that a consensus will be reached between the current government and its successor regarding a transition policy agreed to avoid further tension.
It generates strong uncertainty, which will be appeased or encouraged this Sunday. It must be taken into account that Fixed terms that are renewed between this week and next would expire after December 10, so these days after the runoff will be a pivotal period for time deposits. Whether or not they are maintained at average levels will depend a lot on the outcome of the election.
The post-election exchange rate dynamics It will also be key in that sense. What happens with the exchange rate in the blue dollar market, such as in the MEP, the CCL and the official one, will be decisive for the fixed term dynamics. We will have to see its interest rate of this instrument manages to exceed or at least equal inflation and the dynamics of evolution of the dollar appreciation.
Source: Ambito
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