Argentines have deposited more than $2.3 billion into local dollar-denominated bank accounts since Javier Milei took office as the country's president on Dec. 10, reflecting optimism about his government.
The nearly 17% jump to $16.4 billion means Milei's first three-month dollar deposits have fully recovered their losses over the past year., according to data from the central bank. The greenbacks that Argentines keep in the financial system are an informal barometer of political risk, as citizens tend to withdraw money during periods of volatility and deposit savings in more stable times.
If the trend continues, it would be good news for the Argentine central bank, where a portion of savers' dollar deposits count toward the foreign reserves needed to stabilize the peso.
Definitely, Dollar savings tend to pick up late in the year in Argentina for fiscal reasons, so some seasonal forces will help fuel the rebound in December. More broadly, deposits have good time ahead of them after falling in 2019 from a peak of around $32.5 billion after Milei's predecessor, Alberto Fernández, won the primary election that year. The surprise result generated panic over the return of a Peronist government and heralded the end of the market-friendly administration of former President Mauricio Macri.
In Argentina, checking accounts are denominated in pesos while savings accounts can be denominated in dollars. However, citizens are legally limited to exchanging US$200 into pesos per month and must pay heavy taxes on the transaction, one of the country's many exchange controls due to a lack of dollars in the central bank.
