He Central Bank lowered rates and at the same time, increased the reserve requirement on the remunerated accounts of the mutual funds from 0% to 10%. money market starting April 15. These funds are the ones behind virtual wallets like Mercado Pago, Ualá, Personal Pay, among others. According to the monetary authority, these instruments must leave 10% of these balances immobilized in the Central Bank. But how does it impact the saver?
The measure, adopted by the organization, “moves in the direction of normalizing the prudential regulatory treatment of accounts of a similar nature.”
Common investment funds money market They had gained popularity especially in the last year because they allow you to invest in local currency and obtain a daily return in addition to having easy subscription and immediate redemption. Thus, they became an everyday resource, especially for new savers, offered not only by brokerage companies but also by virtual wallets.
New measure from the Central Bank: how it impacts banks and remunerated accounts
Now, all money market funds (with immediate redemption) They must have 10% of the balances saved from next Monday. That is, those who manage these instruments They will not be able to invest or place that portion of their savers’ money in other tools. And in a context of lower interest rates, this measure will result in a lower performance of these instruments.
“The Money Market funds had been yielding around 70% annually and as they purge the old instruments, the Money Market funds should yield between 50% and 55% more or less. It is a drop of between 1,500 and 2,000 basis points , which is much larger than the drop in the reference rate, which was 1,000 basis points,” a market source commented to Ambit.
“What the reserve requirement rule did is amplify this drop for a particular instrument. Precisely the Government wants to liquefy the remunerated liabilities, which are the remunerated deposits made by the money market funds. So under that premise, the Government is over-punishing the lowering of rates for this type of instruments. Likewise, it is seen that the Government wants a sort of rotation of people’s investments. He wants instead of taking risk from the Central Bank through the Money Market to take more risk from the Treasury and that helps finance it,” he explained.
Meanwhile, the economist Salvador Vitelli stated that what is being sought is “reduce the margin that the banks were having with the paid ones. What they are doing is making it a little more expensive for banks to take deposits. One would expect that the remunerated ones would correct the rate a little, but without a doubt this puts, in a certain way, a brake on that margin that the banks were making”.
Vitelli revealed that banks were taking deposits at 63% TNA in interest-bearing accounts and placing 80% TNA in repos. That gave them 10 extra points guaranteed, without risk.
Lastly, since Aurum Values point out that “banks should lower the rate on remunerated funds; by lowering the rate on Money Market Funds, the latter will have to look for another type of instrument to improve their performance. In short, the FCI MM could channel these funds into collateral (it closed at 62% TNA) and this would then have an impact on greater placements in public securities (directly or indirectly)”.
Source: Ambito
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