Argentina’s President Javier Milei, who took office less than a year ago, has seen a significant increase in foreign currency deposits in Argentina by about $8 billion. This is due to a series of market-friendly tightening measures and incentives to attract dollars back into the financial system.
According to the latest data released by the Central Bank of Argentina on Monday (September 23), the total amount of foreign currency deposits in the country has now exceeded $24 billion, up from around $16.5 billion when Milei took office.
Milei has proposed an amnesty, stating that as long as people bring their funds back into the formal system by September 30, they will not be penalized. For years, depositors have been trying to keep funds outside the formal banking system, with overseas deposits, and even hiding US dollars.
Milei, an economist and former television commentator, came to power in December 2023 amidst a major economic crisis. He faces a daunting economic challenge – to help Argentina recover from economic recession, the government needs to inject funds into the economic and financial system, while also supporting a precarious national fiscal situation after years of budget deficits, dwindling reserves, and high inflation.
In mid-September, Milei released his first budget proposal, forecasting that the annual inflation rate would drop from the current over 236% to 104.4% by the end of 2024, and further decrease to 18.3% by the end of 2025. The economy is expected to grow by 5% in 2025, exceeding the analysts’ predicted 3.5% by the Central Bank.
He emphasized the necessity of fiscal balance and austerity measures in his speech, stating that the key to combating inflation is that by the end of 2025, the official exchange rate will reach 1,207 Argentine pesos to one US dollar, indicating a devaluation pace similar to the government’s current controlled 2% monthly rate.
(Translated and rewritten based on a report by Reuters)