Central Bank Increases Deposit Guarantee Coverage by 733% to Boost Public Confidence

Central Bank Raises Maximum Deposit Guarantee Amount due to Inflation

Ahead of the upcoming XXL weekend, the Central Bank’s board of directors held an early weekly meeting to update the guarantee limits for bank deposits. This decision, outlined in Communication A 7985, has increased the coverage for peso deposits up to $50 million and foreign currency deposits up to US$100,000. The new limits are a response to inflation and mark the first update since December 2022. This increase represents a substantial 733% boost in coverage for peso deposits, providing greater security for account holders.

This insurance applies on a per depositor, per entity basis and is guaranteed by Seguros de Depósitos SA (Sedesa). Sedesa was established by Law 24,485 and regulated in April 1995 by decree 540. Sedesa is a company jointly owned by the Central Bank and financial entities, represented by Caja de Valores. Financial institutions contribute to the Deposit Guarantee Fund based on their average daily deposits in both pesos and dollars. As of March 21st, the balance of the fund stood at $3,344,653,160,951.

The Deposit Guarantee Fund ensures coverage for various accounts such as current accounts, demand accounts, savings accounts, fixed terms, salary accounts, social security accounts and term investments. In addition to insurance coverage banks are also required to participate preventively by making monthly contributions to the fund based on their average daily deposits received in both pesos and dollars. This participation allows Sedesa to respond quickly to any unforeseen circumstances that may arise with respect to depositors funds.

Overall this deposit guarantee insurance system plays an important role in maintaining trust and stability within the banking sector while providing peace of mind for account holders.

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