Since Javier Milei assumed the presidency on December 10, Argentines have once again withdrawn more than $2.3 billion from banks, “reflecting an incipient optimism about his government,” the news agency analyzed . Bloomberg.
He jump of almost 17%, at $16.4 billion, it means dollar deposits in the first three months of Milei fully recovered last year’s losses, according to data from the Central Bank.
The dollars that Argentines keep in the financial system are a informal thermometer of political risk, as people tend to withdraw money during periods of volatility and deposit savings in more stable periods. That’s why they dropped dramatically in October and November last year, during the election months.
In PASO, dollar deposits amounted to 15.2 billion dollars, while in October they had already fallen to 14.6 billion dollars.
If the trend continues, it would be good news for the Central Bank a portion of savers’ dollar deposits is counted in reserves international transactions which, despite the purchases of dollars by the monetary entity, still remain negative.
Savings in dollars they tend to recover at the end of the year in Argentina for tax reasons (since to pay for personal property you take the photo of December 31st and the dollars in savings accounts do not pay tax). This is why the increase in deposits was partly seasonal.
Dollar deposits have fallen from a peak of about $32.5 billion in 2019, after Milei’s predecessor, Alberto Fernández, won that year’s primary election.
The surprising result created panic for the return of a Peronist government and announced the end of former president Mauricio Macri’s market-friendly administration.
In Argentina, checking accounts are denominated in pesos while savings accounts may be denominated in dollars. However, due to restrictions, only some savers can purchase $200 per month and with taxes. For this reason, in general, people are inclined to buy the MEP or Bolsa dollar, which is cheaper than the savings dollar and, unlike the blue, is legal.
Source: Clarin
