One in four dollar deposits in Argentina are being made in fixed terms, and the government is actively encouraging this trend as it anticipates increases in fixed-term rates from banks.
In Argentina, the trend of dollar deposits has reached new heights during the Milei administration, with a notable statistic showing that one out of every four dollar deposits is now being placed in fixed terms. The government believes that as banks begin to increase the interest rates offered on dollar denominated fixed-term deposits, coupled with the implementation of the Fiscal Innocence Law, this phenomenon could reach record levels in the coming months. Currently, fixed deposits comprise a smaller segment of total dollar deposits, but there is optimism that this will change significantly soon.
Recent data from the Central Bank revealed that total dollar deposits in Argentine banks amounted to $37.82 billion, although this reflects a slight decline from the previous record of $38.16 billion reached recently. This figure, however, constitutes over 25% of the total stock of private sector deposits within the country, indicating a strong reliance on dollar savings amid economic uncertainty. The government and banks are hoping to foster a deeper engagement from the public towards fixed-term deposits as they navigate through this fluctuating economic environment.
Banking institutions, both public and private, currently offer varying and relatively low annual interest rates for dollar fixed deposits, but expectations are high that these rates will rise as financial strategies adapt to market demands. The government's push for this increase aligns with broader economic measures intended to stabilize the nation's currency and encourage savings. This narrative not only highlights the current financial habits of Argentines but also reflects a larger strategy of the government to cultivate a more stable economic outlook with increased financial participation from citizens.
