After a change in interest rates, where will savers’ pesos go?

At the beginning of this week, The Central Bank (BCRA) surprised the market with the reduction of the monetary policy rate (Passive Passes) from 100% TNA to 80% or from 171.5% TEA to 122.4%. As well as with the prohibition of Common Investment Funds (FCI) can place Passive Passes with the Central

Thus, the monthly monetary policy rate went from 8.6% to 6.8%, while the Fixed Term rate went from 9% to 5.8%, assuming 70% TNA as some banks pay this morning.

This decision has a full impact on the savings instruments that Argentines use apart from the traditional fixed term, such as surety and Money Marketso although it is premature to know where savers’ pesos will migrate, It is estimated that they will abandon the Money Markets which, until then, had been yielding between 7.5% and 8% monthly.

From Econviews indicate that “lowering rates is controversial, but it can work out well.” He notes that, “beyond the liquefaction effect of paid liabilities, There is a vision in the government that there are plenty of pesos in the Argentine economy.” For the consulting firm, the measure is risky, But that doesn’t mean it’s going to go wrong.since “what undoubtedly makes a lot of logic is to remove one of the restrictions that weighed on the financial system: the minimum fixed term rate. Which he believes led to behaviors such as banks not wanting to receive institutional fixed terms, “which seems totally against the spirit of what the financial system should be“.

Where will the pesos go?

As mentioned above, it is premature to answer that question. But with money market funds losing appeal, and with the aim of avoiding losses in the face of inflationone could sense that investors will look for funds with higher returns. Flows are expected to be directed towards linked funds tied to the dollar and those with settlement in T+1.

Since MEGAQM Common Investment Funds they see an opportunity in T+1 Private and they indicate that “CER funds lost ground due to the unraveling of that curve, but now they are recovering.” Likewise, they indicate that, “if more time is available, the alternative is to channel excess liquidity into T+1 funds.”

The broker indicates that “We continue to think about the need to take coverage in the face of divergent scenariossince the degree of uncertainty makes it necessary to maintain a high degree of diversification.” Regarding the CER segment, The funds seek to take advantage of the medium and long tranches to earn rates similar to inflation. “The short section is already in prices.”

Meanwhile, in the segment dollar linked “it has been migrated towards psot coverage 06/30”, indicates MEGAQM. The entry point to the year 2024 was marked by strongly negative spreads both in the CER and DLK curves.

This accounted for returns that were anticipated. to the evolution of economic variables.

From that perspective, we are in a year where it is difficult to find assets that beat their benchmark indices. “This forces us to be very attentive to the movements within each curve to capture the rearrangements,” warns the broker.

• When the scenario presents these challenges, the recommended strategy is always to manage a diversified portfolio and analyze the opportunities that may appear.

• In this framework, “we see value in Megainver Fixed Rent, a T+1 fund that exclusively manages private instruments.” This fund participates in tenders for Badlar instruments from the private sector. It has a longer duration, but the expectation The current yield is above the Money Market or the FCI T+1, the broker concludes.