Fixed term: how much does it pay to invest $100,000 after the bank-by-bank rate reduction

The BCRA’s decision is a consequence of the inflationary slowdown and the official strategy of keeping savers’ returns below inflation, accentuating the liquefaction of savings.

The reduction in the interest rate also favors the Central Bank’s accounts since it will pay less interest on remunerated liabilities., one of the main concerns of President Javier Milei and the economic team. As could be seen on the official BCRA website, the rate proposed by most banks is already below 70%.

Fixed term: how much does bank pay per bank if you deposit $100,000 within 30 days

• Banco Nación: 60% TNA
• Santander: 60%
• Galicia Bank: 70%
• Provincial Bank: 60%
• BBVA: 57%
• Macro Bank: 64%
• HSBC: 60%
• Credicoop Bank: 60%
• ICBC: 60%
• City Bank: 60%

BCRA lowers rates: what is the impact

This policy implies a strong loss of purchasing power of savings through the instrument most used by ordinary people. Also in the working capital of companies that, in the face of exchange restrictions, resort to this type of placement. The same thing happens with money market FCIs: by investing a considerable part in fixed terms, their returns are directly impacted by the BCRA’s decision. These funds have a growing audience thanks to the fact that they are offered by numerous virtual wallets.

All in all, the perspective is that, with the reinforcement of the peso blender, the Central reduce the emission associated with the payment of interest on repos by $295,000 million per month Passives. The estimate was made by the technicians of the SBS Group based on the most updated data on the stock of passes ($34 billion). The firm pointed out that the rate cut precisely aims to “continue the liquefaction of real stocks of remunerated liabilities.”

In that sense, the Libertad y Progreso Foundation calculated that, due to the abrupt drop in rates, the quasi-fiscal deficit went from 9.3% of GDP in December 2023 to 5.4% in March 2024.

In fact, in the statement that announced the decision on rates and other measures, the Central Bank celebrated that “since December 10, the monetary base and the broad monetary base (including liabilities remunerated in pesos) have been reduced at a rate of 10 .5% and 5.8% average per month, respectively, in real terms.”

The payment of interest was the main driver of monetary issuance in these months, along with the purchase of dollars in the official market. And the economic team proposes to reduce it to a minimum: to do so, in addition to the strong liquefaction, it opted for the migration of banks’ repo holdings into Treasury debt securities and the dollarization of a portion of the remunerated debt. from the BCRA through BOPREAL.

The urgency of officials to liquidate these liabilities lies in the fact that Both Javier Milei and Caputo consider it a decisive prior step to lift exchange restrictions.. In fact, official offices understand that, with net reserves still negative and no concrete news on the external debt they are negotiating (mainly with the IMF), it is still risky to open the stocks: they fear not being able to face a possible run on conditions. and, therefore, inflation accelerates again. For this reason, they want there to be even fewer pesos that can put pressure on the dollar.