New Deposit Guarantee Limits Provide Greater Protection for Banking Sector in Argentina

Central Bank Raises Maximum Deposit Guarantee Amount due to Inflation

The Central Bank recently announced an update to its deposit guarantee limits, with deposits in pesos now covered up to $50 million and those in foreign currency covered up to US$100,000. This decision was made in response to inflation and marks the first update since December 2022. Previously, deposits in pesos were guaranteed up to $6 million, making this update a substantial increase of 733%.

The Deposit Guarantee Fund was established by Law 24,485 and regulated in April 1995 by decree 540. This fund is managed by Sedesa, a company jointly owned by the Central Bank and financial entities represented by Caja de Valores. Financial institutions contribute to the fund based on their average daily deposits in both pesos and dollars. As of March 21, the balance of the fund was $3,344,653,160,951.

In addition to insurance coverage, banks are required to make monthly contributions preventively to the fund based on their average daily deposits received in both pesos and dollars. These contributions help ensure that the fund can respond quickly to any risks for depositors. The participation in the trust that oversees Sedesa is determined by each financial institution’s contribution relative to the contributions collected from the entire Argentine banking system.

Overall, this deposit guarantee insurance system provides peace of mind for account holders by protecting their funds in case of any unforeseen circumstances. It plays a crucial role in maintaining trust and stability in the banking sector.

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