The most traditional financial investment of Brazilians registered withdrawal for the second month in a row. In February, Brazilians withdrew R$5.35 billion more than they deposited in their savings account, the Central Bank (BC) reported today (7th).
This was the second largest net withdrawal (withdrawals minus deposits) recorded for the month of February. The previous record for the month had been registered last year, when withdrawals had exceeded deposits by R$5.86 billion.
With the performance of February, savings accumulate a net withdrawal of R$ 25.02 billion in the first two months of the year. This is the largest accumulated withdrawal for the period since the beginning of the historical series, in 1995. The result was driven by the high volume of withdrawals in February, when the investment registered a net withdrawal of R$ 19.66 billion.
Traditionally, the first months of the year are marked by a strong volume of withdrawals from savings accounts. Payment of taxes and expenses such as school supplies and Christmas shopping in installments impact Brazilians’ accounts at the beginning of each year.
Last year, savings had registered a net withdrawal of R$ 35.5 billion. The application was pressured by the end of emergency aid, by low incomes and by the greater indebtedness of Brazilians. The net withdrawal – the difference between withdrawals and deposits – was not higher than that recorded in 2015 (R$ 53.57 billion) and in 2016 (R$ 40.7 billion). In those years, the strong economic crisis led Brazilians to withdraw funds from the application.
Performance
Until recently, savings yielded 70% of the Selic rate (basic interest in the economy). Since December of last year, the investment has started to yield the equivalent of the reference rate (TR) plus 6.17% per year, because the Selic has returned to above 8.5% per year. Currently, the basic interest rate is 10.75% per annum.
The increase in interest rates, however, was insufficient to make savings yield more than inflation. In the 12 months ending in February, the investment yielded 3.84%, according to the Central Bank. In the same period, the National Consumer Price Index-15 (IPCA-15), which works as a preview of official inflation, reached 10.76%. The full IPCA for January will be released next Friday (11) by the Brazilian Institute of Geography and Statistics (IBGE).
If inflation falls in the coming months, the book may return to a positive yield. For this year, the Boletim Focus, a survey of financial institutions released by the Central Bank, provides for official inflation of 5.65% by the IPCA. With the current formula, savings would yield around 7%, if the Selic remained at 10.75% throughout the year. The yield could be a little higher if the Central Bank continues to raise the Selic rate at the next Monetary Policy Committee meetings.
Article amended, at 5:38 pm, in the first paragraph to correct the data reference month.
