New Deposit Guarantee Limits Announced by Central Bank Amid Inflation: Up to $50 million for Pesos, $100,000 for Foreign Currency
In preparation for the upcoming XXL weekend, the Central Bank announced an update to its deposit guarantee limits. Under this new policy, deposits made in pesos are now covered up to $50 million, while deposits in foreign currency are covered up to US$100,000. This decision is a response to inflation and marks the first update since December 2022. Previously, peso deposits were guaranteed up to $6 million, resulting in a substantial increase of 733% in coverage.
The insurance applies on a per depositor, per entity basis and is provided by Seguros de Depósitos SA (Sedesa). Sedesa was established by Law 24,485 and regulated in April 1995 by decree 540. It is a jointly owned company between the Central Bank and financial entities represented by Caja de Valores. The Deposit Guarantee Fund ensures coverage for various account types such as current accounts, demand accounts, savings accounts, fixed terms, salary accounts, social security accounts and term investments.
To maintain this insurance coverage system banks are required to make monthly contributions based on their average daily deposits received in both pesos and dollars. As of March 21st the fund had a balance of $3 billion USD. The participation in the trust that oversees Sedesa is determined based on each financial institution’s contribution relative to the total contributions collected from the Argentine banking system.
Overall, this deposit guarantee insurance system provides a safety net for depositors in banks ensuring that their funds are protected in case of any unforeseen circumstances. It plays a crucial role in maintaining trust and stability in the banking sector providing peace of mind for account holders.
