------------------ ESP

Early-Payment UVA Time Deposits Have Doubled

During last month, the stock of early-payment UVA time deposits doubled, which explained a 10% increase in aggregate time deposits recorded since April 13. On this date, banks were open once again within the framework of the health emergency ordered by the Executive Power due to the coronavirus pandemic.

In February, the BCRA launched a new investment option: early-payment UVA time deposits at a positive real interest rate. The minimum yield for these deposits is 1% over the inflation rate if deposits are held for the full term of 90 days and, if paid in advance as from 30 days, 70% of the monetary policy rate. Hence, savings for 90 days pay an interest rate equal to the Consumer Price Index reported by INDEC plus 1%, which allows depositors to keep their savings’ purchasing power and have gains over the inflation rate by one p.p.

Banks must offer this investment option to all depositors by all possible means, either in-person at branches or through electronic platforms.

The Superintendence of Financial and Foreign Exchange Institutions is in charge of monitoring that banks offer early-payment UVA+1 time deposits. Likewise, by mid-April, the BCRA rose the yield on traditional time deposits by setting a minimum interest rate—70% of the monetary policy rate, which at present stands for 26.6% APR, and 30.1% (EAR) for 30-day deposits.

As under Communication A7000, this interest rate is also ensured for traditional time deposits in pesos for up to ARS4,000,000.

May 3, 2020.

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