Unbridled inflation: sharp rise in the stock of UVA term deposits
The bone fixed UVA payments they continued to grow in April and the average increase in the stock in April almost doubled that recorded in March. This is shown by the official statistics of the central bank (BCRA).
With a inflation which is not weakening, the stock of deposits that savers can build up from the home banking for protect your savings against rising prices it increased by nearly $42,000 million, bringing the average balance to $250,763 million.
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So the monthly growth was 20.1% in April, against 11.3% which had been recorded during the previous month. The increase in UVA investments in April represented two-thirds of what these same savings instruments had increased throughout the first quarter (30.2%).
the consultant LCG believed that they were mainly driven by higher inflationary expectations. Although UVA-adjustable placements remain a small part of total deposits, LCG pointed out that gain traction with retailerssegment which posted monthly nominal growth of 16%.
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Between April 2021 and the same month of this year, UVA term deposits from the private sector recorded an increase of 108.9%. The value was in line with the year-over-year growth they had marked in March and beat the evolution of inflation in the same period.
On the side of the traditional fixed durationsshowed an average increase of $228.5 billion last month, which means a 5.8% monthly improvement and a 55.1% increase over the last 12 months. In either case, the increases would be less than the cumulative inflation for both the month and the year.
Record inflation and rising rates
On April 13, INDEC released data from inflation March, which reached 6.7% and set a record for the past two decades.
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In response, the BCRA defined an increase in the minimum return on fixed retail contracts, which was set at 46% in annual nominal terms. For the rest of the depositors, the return rose to 44%.
In addition, the entity has defined that customers who make a to pay Pre-cancellable UVA at 90 days and disarm it early from the first month they would get 41% instead of the 38.5% who ruled before.
the increase these rates has become effective from Monday 18 April and its effect on savings incentives We see in the daily evolution that the deposits have shown:
- In fixed UVA payments, the stock averaged $238.6 billion before the release of inflation data and the rate hike. In the days that followed, the average balance rose to $261.7 billion.
- For their part, the traditional fixed durations they had an average stock of $4.129 billion before the rate hike. This value rose to $4.199 billion after the BCRA decision.
Next week, the Indec will publish inflation data for April and some analysts are already they expect a further adjustment of the rates in pesosin accordance with the Government’s commitment to the IMF to maintain the positive return on savings in local currency.
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The analysts of LCG pointed out that a more contractual monetary policy by the BCRA, with a rise in the reference rate, could boost traditional fixed-term contracts. At the same time, they considered that the deposits which UVA corrected will continue to gain share as long as inflation projections remain high.