The new rise in the interest rate of the Central Bank of up to 81% of TNA, raises doubts among savers due to high inflation. How much do you earn with $100,000
By Mariano Jaimovich
20/04/2023 – 16,23hs
The strong inflationary rise and the escalation of the dollar of the last few days prompted the Central Bank to raise the interest rates paid by traditional fixed terms, although the level announced for now seems little. In short, placements will now offer 81% annualso savers want to know how much is earned now with a 30-day deposit.
Is that the Monetary entity decided to raise this Thursday 300 basis points of returns to placements of individuals that are less than $10 million. In other words, the annual nominal rate (TNA) became 81%, which represents a monthly income of 6.66%.
It should be remembered that in mid-March the fixed term interest rate had risen from 75% to 78%. And now it rises again 3 percentage points more.
The problem is that the March inflation was 7.7%and for April economists expect it to be around 7%, figures that exceed the new monthly yield that a bank deposit is offering. Added to this is that the informal dollar is advancing throughout April is 9.6% , as it scaled from $394 to the current $432.
How much do you earn with a fixed term of $100,000
However, With respect to how much you will earn with the new increase in the interest rate of the traditional fixed term, it can be given as an example that if you invest $100,000 in 30 days, after that period you will obtain $106,657.
Hence in just one month they will earn $6,657, which represents 81% TNA, or 6.66% per month. Some $250 more than what was obtained before this new increase announced by the Central Bank.
The Central Bank raised 3 percentage points to the interest rate of the traditional fixed term, up to 81%.
However, the equation begins to change in favor of the traditional fixed term if one takes into account the effective annual rate (TEA), which is 119.4%, and which represents renewing the initial placement plus the interest earned every 30 days, consecutively for 12 months. Therefore, the theoretical monthly rate obtained with this investment is 9.81%, a level that exceeds expected inflation.
precisely, this TEA of 119.4% exceeds forecasts for the Consumer Price Index (CPI)because various economists today are projecting an increase of 115%.
Does the interest rate rise?
For analysts, the increase made to the rate paid by the traditional fixed term of 3 percentage points up to the 81% annual falls “short” compared to the march of prices of the economy and the tension that exists in the exchange market, due to the abrupt rise of the dollar in recent days.
“For the taste of the market, it seems to me that the Central Bank may be falling short. However, they are sidereal rates. The problem is the degree of convulsion that we are currently experiencing in the economy, which makes rates seem relatively short, especially taking into account what the Treasury pays, which for last Wednesday’s tender validated 132% per year,” he says. to iProfessional the economist Salvador Vitelli by Romano Group.
Also Jose DapenaUcema economist, considers that “does not reach this new interest rate, but not because it is a bad measure, but because the problem is another. With the rate and the current context, it is not possible to get them to sell dollars in a significant way since the gap is very large.”
In short, such high monthly inflation levels far exceed the interest rate paid by a traditional fixed term, something that discourages savers from staying in pesos, especially in a scenario of electoral uncertainty in which the dollar hits jumps that worry the investor
