Interest Rates on CD's and commercial paper going UP!

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Golo100

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Jan 5, 2002
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The pressure is now on to pay much higher interest rates on those who wish to still invest in pesos. Banco Central, in an effort to defuse the disaster created by Hippo's personality and perception among the people that he does not know what he is doing to the economy, is coming to try to save the peso from extinction.

They are announcing that beginning next week they will be offering certificates of investments paying a whopping 30% on your investments of over $100,000 pesos.

I believe this will have lots of takers, specially since they appear to be for up to 90 days.

The ones who will suffer this are those who have to borrow money.

TW
 
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sjh

aka - shadley
Jan 1, 2002
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the 30% return still will not offset the devaluation risk and the risk of a bank collapse...

if the peso goes from 25 to 26.8 in the next 90 days, you will lose compared to cash in a USD account at 0% interest. That is assuming the bank is still solvant after all its loans are defaulted on.
 
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Golo100

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sjh

That's correct. But the problem is where can you buy dollars? No one is going to give up their dollars, if they still have them. If there are no dollars you just have to protect whatever pesos you have.

TW
 
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sjh

aka - shadley
Jan 1, 2002
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Golo, that is a very good point. A real problem there. If you do get dollars check for fakes... We got a few last time. funny thing is we just converted them back to pesos at the same place and spent them. hahahhaha
 
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BushBaby

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Jan 1, 2002
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Golo, I would value your opinion/comments.
Sometime ago I was advised that to charge more than 1% in interest charges on a loan was illegal. The Government had set this standard of a maximum of 1% - are they now breaking the law by allowing the banks to charge in excess of 18% p.a. ( let alone the 36%-40% they must now be demanding) for loans?

I appreciate that what is LAW in this country is not neccessarily what is common practise & even more unlikely to be what is enforceable, but it would be interesting to see what the Governmental response would be to being reminded that they are condoning the breaking of the law. Doubtless, under today's environment of not being allowed to speak out against the Government, I would be locked up & have the key thrown away, but I am prepared to do my bit if it only means that Hippo is proven to be the biggest hippocrite this country has seen in many a long year!!

Perhaps I ought to post this under 'Legal' & get Fabio's response too??? - Grahame.
 
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Golo100

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Jan 5, 2002
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New Laws

With all the new laws being enacted by congress they can do anything they want. This is why Codetel, Edenorte, Edesur, CAASD and all the service industries can charge whatever they want. Controls are gone. Not that we ever had any, nut now it is legal to be a usurer.

TW
 
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