Time deposits adjusted by units of purchasing power (unidad de valor adquisitivo, UVA) have grown since the end of 2021, with a clear acceleration as from March. UVA-adjusted time deposits—including traditional and early-payment ones—ended March with a stock of over ARS250,100 million. At constant prices, they remained at similar levels to those recorded by mid-2021, when the peak was registered. Both deposit instruments—updated by the Reference Stabilization Coefficient (Coefficient de Estabilización de Referencia, CER)—grew in the last month (30-day rolling average): as of April 19, traditional and early-payment deposits rose 7.8% and 12.8%, respectively.
Traditional and early-payment deposits are the only CER-adjustable time deposit instruments. Traditional time deposits in pesos are converted into UVA upon issuance. At the end of the deposit term, the accrued interest is calculated and the updated principal is converted according to the UVA value at that time (the price of UVA is updated on an ongoing basis according to CER). The minimum term for this type of deposits is 90 days.
UVA early-payment time deposits also have a 90-day term, however an early termination option is available, effective as from 30 days. The interest rate applicable differs depending on whether the instrument is paid in advance or held to maturity. For instruments paid in advance, there is a fixed interest rate in pesos that at present stands at 41% APR (49.66% EAR). For instruments held to maturity by natural persons, a UVA + 1% minimum interest rate is granted.
April 28, 2022