In January, savings have the largest outflow of resources in history

Withdrawals from savings accounts exceeded deposits by R$ 19.665 billion in January this year, according to data released by the Central Bank this Friday (4).

This is the highest volume of net withdrawals for a single month in the BC historical series, which began in January 1995.

In January, deposits in the investment modality totaled R$ 260.494 billion, while withdrawals totaled R$ 280.159 billion.

The previous negative record was from January 2021, when there was a net withdrawal of BRL 18.15 billion. Historically, the month is marked by resource redemption. Since 2013, there is no record of a positive balance at this time of year.

The withdrawals coincide with the expenses planned at the beginning of the year, such as, for example, the payment of taxes —IPVA and IPTU—, in addition to enrolling children in private schools and purchasing school supplies, among others.

Other economic factors also influence the movement of withdrawals, according to José Márcio Camargo, chief economist at Genial Investimentos.

According to him, the increase in inflation and its impact on workers’ real wages and the migration of investments to other income funds with the increase in the interest rate led to the withdrawal of funds from savings.

“Other assets have gained greater than the savings account, which tends to generate a flight to these funds,” said Camargo.

On Wednesday (2), the Central Bank’s Copom (Monetary Policy Committee) raised the basic interest rate — the Selic — from 9.25% to 10.75%.

The Selic rate has been below double digits since July 2017, a period in which it was reduced in the face of falling inflation and virtually stagnant economic activity.

Now Brazil is experiencing a new reality. In 2021, the purchasing power of Brazilians was once again haunted by double-digit inflation and it is up to the BC, through the Selic, to try to hold back this expansion.

In the 12 months of last year, the IPCA (Broad Consumer Price Index), measured by the IBGE (Brazilian Institute of Geography and Statistics), accumulated a variation of 10.06%.

The increase is the highest for the period from January to December since 2015 (10.67%). At the time, the national economy was going through a period of recession under Dilma Rousseff (PT) government.

Now, the global economy is still suffering the effects of the Covid-19 pandemic, with a shortage of supply of inputs for the production of items consumed by families, which raises their prices.

In the Brazilian scenario, the perception of increased fiscal risks —due to the increase in government spending and the possibility of cutting taxes in an election year— also contributes to the rise in the dollar, which further drives inflation.

Rising prices erode consumers’ income. In addition, with the higher Selic rate, savings lose their attractiveness for other investments.

“As the Selic has been rising, surely financial market applications are becoming more attractive,” said economist Raul Velloso, a specialist in public accounts.

“The rise in the interest rate explains part of this flight from savings, in addition, people are needing to spend due to the difficulties of financial management of each one. We are in a phase of very high unemployment, economy growing little, a certain containment tax, how can people not put their hands on savings to survive?”, said Velloso.

In this scenario, the BC also signaled that the tightening cycle started in March last year has not come to an end, in the face of still resistant inflation that threatens to burst the target for the second year in a row. Selic should go up.

According to data from the monetary authority, despite the outflow of resources in January, the stock in savings is R$ 1.016 trillion and the income was R$ 5.39 billion in the month.

The balance, which is the entire amount invested in the modality, reached the mark of R$ 1 trillion for the first time in history in September 2020, after five months of paying an emergency aid of R$ 600 to more than 60 million Brazilians. .

In 2021, savings account withdrawals exceeded deposits by BRL 35.49 billion – the first negative annual result since 2016, when the modality recorded a net withdrawal of BRL 40.7 billion.

In December last year, however, savings had a net inflow of R$ 7.66 billion, driven by the payment of the 13th salary.

Currently, the savings account yields 0.50% per month (or 6.17% per year), plus the TR (reference rate). The indicator is calculated by the BC based on interest rates on National Treasury Bills and fluctuates daily.

The savings rule changed in December of last year with the Selic rising above 8.5% per year.

Currently, the basic interest rate is 10.75% per year. In this case, the rule provides that the savings income is 0.50% per month, plus the TR (for new and old deposits).

Amid the escalation of the Selic, the TR, which was null from September 2017 until the end of last year, also rises. When the interest rate is less than or equal to 8.5% per year, the investment is limited to 70% of the rate, plus the TR.