The Indexed Unit (UI) As a savings option, it won again dollar in the first half of 2023. In fact, investing in that unit of value yielded more revenue than betting on the US currency in the last two decades.
To understand what happened in the first half of the year, this practical and easy-to-understand example published by Personal Sherpa, specialized in personal finance, is worthwhile.
Assume as a starting point that At the beginning of this year, a person had $100,000 saved and wanted to protect them from inflation.
In January they could consider two options. One was to change those $100 thousand for 17,851 IU, which at the time were worth $5,6018 each.
Another alternative was to buy US$2,439 at the time with an exchange rate of $41 on the sale. This currency is still the preferred currency for the vast majority of Uruguayans when they decide to save and even when their expenses (in general) are usually made in Uruguayan pesos.
What did the photo show 6 months later? The result was that the 17,851 UI were equivalent to $103,949 at the end of June. So if the person who opted for this alternative maintained the purchasing power of the money saved that he had at the beginning of the year and after six months with inflation around 4% (the official data will be released this week).
While, if it was decided to buy the US$ 2,439, the first semester ended with $94,390 taking into account the exchange rate that was $38.7 in the BROU purchase.
“The difference between options is $9,558, 10.1% in favor of the UI,” said Personal Sherpa. If you look at what happened in the last two years, in 2022 the difference was 29.1% in favor of the UI, and 8.1% in 2021.
What is the UI? The Indexed Unit is a unit of value that is readjusted daily according to inflation measured by the CPI (index that reflects the variation in prices of goods and services consumed by Uruguayan households).
This index tries to reflect the increase in the average cost of living of the population. It is also worth mentioning that each one faces different inflation, to the extent that the basket of goods and services consumed is different.
What happens if a longer period is taken, for example the one that goes from June 2002 to June 2023? The difference was 157% in favor of keeping balances in UI compared to keeping them in dollars.
