In Argentina everything is possible. And to what is presented as unlikely can become reality with the passage of time.
The Argentines know about changes of scenery. The successive crises they faced the "tanned" against economic and financial storms they faced. The greenback was his great ally to protect against the increased uncertainty.
And in the country of "everything is possible", he began to deepen a trend that was already hinting throughout the second half of the year, unexpected time ago: the advance of a large part of society to disarm its holdings dollars and dump their money in local currency time deposits.
Of course for this phenomenon that individuals first had to convince the U.S. currency was not going to shoot and remain numb, at least in the short term. (See note: "Dollar: the" antidotes "that keep you asleep and that alarms can wake")
And although the rates offered by banks deposits in failing to protect the pockets of real inflation, for least be guaranteed an average of 11% interest then, if necessary, buy foreign currency.
The following table shows the different rates offered by entities:
This race started for much of the depositors - who will not give up part of their purchasing power in the hands of inflation - the deadlines are fixed and the least bad option , and more affordable, to protect of a rise in prices and installed by double digits.
"Both retailers and wholesalers investors look attractive returns on deposits in pesos, both for the stability of the dollar, as interest rates, which imply a gain of more than 11% annually in pesos / dollars "stressed from Econviews, the consultancy led by Miguel Kiguel.
Thus Short term deposits have become a kind of sedative that helps to overcome the current "dollar syndrome still." Bicycle
Creole
iProfesional.com recently anticipated the reappearance of the famous "financial cycle." Those who climb it off their dollars and time deposits, with the intention of obtaining an income that will assure a profit in foreign currency (see note: financial spring greening is accompanied with a fixed deadlines ).
regard, the economist Thomas Bulat noted: "As in which the currency does not move too much, starts to get some income in dollar . That is, if I see that I have a horizon in which the currency is not going to move, I can sell, spend and evaluate local currency to get back and then buy back, which I do a bicycle. But the remarkable fact is that the unit is still value in dollars, there is a change of mentality. And this is how weight becomes a tool to increase my profitability in dollars. " Bulat
also stressed that what is happening now is not a process of dollarization, but a mechanism that uses local currency to get higher returns in other currencies.
"will last a little while, not eternal. But is a good time to take that leap "he said.
In this sense, the economist Gabriel Caamaño Gomez, Joaquin Ledesma & Associates, also warned that the phenomenon is temporary , because "over time people keep saving in dollars."
"Search exploit this context implies that investments are still short term and not exceed six months " said the consultancy run by Kiguel.
investors also are more sophisticated or companies that seek to cover for possible hikes and exchange rate for that agreed between the dollar future contracts. The mechanism is: sell dollar, switching to local currency and deposit those funds in the short term. At the same time ensure the dollar value of the maturity of the investment (formalizing an agreement and paying a premium). Then, with the weights generated by the fixed term cancels the contract agreed upon (future dollar), and obtaining buy back the currency rate difference.
grateful Banks
Across the counter, the celebrated banking system to see how increasing placements.
However, neither show much enthusiasm to attract more deposits and, therefore, tempting savers with a higher rate. So much so, that from late July to date, the interest offered fell about 3 percentage points.
happens that what they receive they can not pay in full, because there is insufficient demand or individuals or companies that, for now, have no mood to borrow.
So what do the authorities?
increasingly provide the State, encouraged by this increased cash flow and inflated by the abundant liquidity in times knew how to keep pre-election phenomenon we knew it this way (see note: " private sector banks do not ask and you took the" gustito "to give the State )
Change everything changes
The turnaround in capital outflows contributed significantly to strengthening this new scenario.
" The key to financial spring in the country is the decline in dollarization portfolio," said Carlos Melconian, head of M & S Consultores.
Indeed, a leak rate of $ s2 monthly 000 million hit to the economy during the first half year, moved to net income as calculated by the consultant Miguel Bein, would be about $ 350 million in October.
Jorge Todesca, Finsoport director and former deputy economy minister, confirmed the change of scenery: "What we're seeing is a process contrary to that we registered a few months ago, in which observed a deposit dollarization." Implications
"The financial system gives greater liquidity makes it easy to provide and contribute to low rates. The effect is positive, "he said Bulat.
Todesca also said that process "is good for both the Central Bank and the country, since it helps reduce the cost of borrowing, which is one of the goals of BCRA."
The former minister predicted that it is likely that the highest monetary authority " continue buying dollars by year-end and emitting , which is favorable because they recover more instruments to assist in an expansionary monetary policy."
regards the future of interest rates, Gabriel Martini, Abeceb.com consulting economist, said that "although the trend is downward, the settings are going to be making progress."
Rodrigo Benitez Alpha Studio economist, agreed: "This new context benefits the Central further progress in building reserves and also to all the banks that would have more loans may reduce interest rates, as happened in the short lines."
This option for the depositors to win with the performance of loans and, if necessary, buy back later greenback is valid provided that the Central Bank encouraged this move to maintain the exchange rate.
And it seems that it will . In short, this transfer (from dollars to pesos), favors the financial system is to reverse a process that lasted two years and represented an outflow of foreign exchange exceeding U.S. $ s42.000 million (from late 2007 until the second half of 2009).
the gesture of the Government helped
The latest report of the Argentine Institute of Finance Executives (IAEF) considered that "the enabling environment in international markets and the favorable expectations that opened the announcement of the reopening of trade with bondholders, led to an inflow of funds from abroad. "
This view is shared by the Econometric consultant: "The lower expectation of devaluation, as a default on government debt National helped to reduce the outflow of capital and encouraged individuals and companies to take positions in domestic financial assets in search of higher yields than those offered by foreign assets. "
is how this new scenario, relocates the deadlines fixed in the center of the scene , compared to U.S. currency displayed well tamed by the Central Bank and also of "doldrums" in the world (see note: countries celebrate but left all by himself the dollar to pay the party ).
"Of course this is not a full dollarization, because we would see a large sales volume and not what we're seeing, "said Gabriel Caamaño Gomez.
What happened in October?
In October, deposits in pesos (including time deposits, savings and checking accounts) increased $ 4,858 million. That is, increased by 3.4% compared to September, reaching the highest increase in the last two years.
Of the three components time deposits were "the little engine" that drove the rise , since these loans expanded by 4.9%, the highest variation since January this year.
In October, the deposits in U.S. currency fell U.S. $ S112 million, equivalent to $ 428 million.
"He, for the first time this year, fixed term deposits in dollars fell from the previous month " espoused Econviews. Ramiro
Castiñeira of Econometrics, gave his view on the subject: "This is leading to signs of recovery. In addition, about 20% of capital inflows to the economy came from the disarmament of foreign currency loans within the financial system. "
Other issues
But it is not only the slightest expectation of what drives devaluation peso deposits. Also affect other issues, both locally and internationally.
Jorge Vasconcelos, IERAL Chief investigator considered that this process is the result of behaviors associated with improved clearance of exports and the brake made in capital flight. "
"In the world of the stock situation improved, and here too. The Government's decision to go ahead with the debt swap generated a change in expectations is reflected in this trend, "Vasconcelos concluded .
Credits go slowly
Meanwhile, since Ecowiews noted that while private sector credit growth remain a month to month, it is moderate when compared with the evolution of deposits.
In this context, "consumer loans took the post as the main drivers of the monthly expansion in the last three months, a role that trade had been met so far in 2009," the report said.
Meanwhile, funding for personal loans or credit cards through rose 3% on average in October and are the only lines that do not slowed from a year past.
What about companies?
On the side of companies, they are still reluctant to borrow from the banking system.
Part of this resistance is that in recent months began to recover, albeit slowly, the capital market.
"we are greater movement in the access to this market, where companies find funding through post-dated checks, issuance of bonds, stocks and financial trusts, generally getting longer timeframes and more affordable rates, "said the consultant who directs Miguel Kiguel.
In line with the reduction of deposits in dollars, "said currency loans, equivalent to 15% of private sector credit, fell for the fifth consecutive month (2.3%) and are losing ground to level a year ago (16.6%), "said Work, who also noted that "the dollar loans are primarily concentrated in a single document signing companies."
Source: http://finanzas.infobaeprofesional.com/
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