Argentines Move Money into Short-Term Deposits Ahead of Election

(Bloomberg) -- With the presidential election date just 24 days away, Argentine savers are increasingly choosing short-term instruments for their deposits.

Fixed-term deposits have fallen almost 8%, from 1.26 trillion pesos prior to primary elections on August 11. These deposits pay approximately 60% annually in pesos. The proportion of deposits in instruments shorter than two months rose to 75% of the total, from 66% in January 2019, according to central bank data.

“The current trend is to have as much liquidity as you possibly can,” said Diego Chameides, a strategist from Banco Galicia, one of the three major private commercial banks in Argentina. “There’s surely additional pressure, as before any election. Those who are still able to dollarize will be doing just that in the next few days.”

Private sector deposits over 60 days have fallen 15% since Aug. 9 to (56.5 billion pesos), while shorter deposits only fell 3% (27 billion pesos) in that period.

Reserves Under Pressure

The proximity of the elections adds pressure to the central bank, which already sold $3 billion in the spot market since the primaries. The fall in international reserves deepened this week to about $200 million per day.

The quicker drop in reserves this week is due to a series of debt payments, including a Treasury bill denominated in dollars and some obligations with international entities, according to a person familiar with the matter. Since the primaries, reserves have fallen $17.8 billion. The Economy Ministry is monitoring two key maturities before presidential elections, which correspond to Bonar 2020 and Bonar 2037 coupons due on October 8 and 18, according to the person.

The central bank is closely observing daily moves and potential exchange restrictions, said a person familiar with the issue who asked not to be identified because the matter isn’t public. This week, for instance, a new system will be launched so that banks are able to get a consolidated record of dollar purchases by individuals, and thus prevent people from being able to purchase amounts over $10,000 per month.

Original Story:
Argentinos acortan sus plazos fijos ante tensión electoral

Reporter on the original story: Ignacio Olivera Doll in Buenos Aires at ioliveradoll@bloomberg.net

Editors responsible for the original story: Daniel Cancel at dcancel@bloomberg.net, Jorgelina do Rosario, Carolina Millan

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