\t\t\t\t\t \t\t\t\t\t \t\t\t\t\t Since taking office in late 2023, Javier Milei has tried, in more ways than one, to get Argentines to pull their dollars out from \u201cunder the mattress\u201d that is, to bring them into the formal economy.<\/p>\n
The first initiative was the Asset Regularization Regime, a tax amnesty that allowed Argentines to declare previously hidden assets. It launched on July 18, 2024, and its final phase closed on May 8, 2025, with more than US$32 billion brought into the open.<\/p>\n
Although experts considered it a major success, it wasn\u2019t enough for the Milei administration. In 2025, Congress passed the Fiscal Innocence Law, allowing Argentines to use their undeclared dollars under a presumption of innocence before the tax authority.<\/p>\n
That wasn\u2019t enough either. Earlier this month, Economy Minister Luis Caputo sent Congress a revamped and expanded version of the law, making it even easier for taxpayers to regularize undeclared dollars.<\/p>\n
One of the bill\u2019s most notable changes is that it scraps the wealth and income ceilings for joining the regime meaning that, from now on, \u201clarge taxpayers\u201d will also be able to benefit.<\/p>\n
Milei\u2019s is hardly the first government to try to get savers to declare their dollars. If anything, it\u2019s the norm: the administrations of Alberto Fernndez, Mauricio Macri, and Cristina Fernndez de Kirchner all did the same, with varying degrees of success.<\/p>\n
That\u2019s because the amount of dollars Argentines hold outside the system is enormous. According to official INDEC data, the estimated total at the end of 2025 was US$254.9 billion, up 4.5% from a year earlier.<\/p>\n
For comparison, the loan the International Monetary Fund (IMF) extended to Argentina in 2018 the largest in the institution\u2019s history was US$45 billion.<\/p>\n
Dollar demand isn\u2019t letting up Despite the stability of the exchange rate, Argentines\u2019 appetite for buying dollars hasn\u2019t eased. According to Central Bank data, between January and April of this year, foreign-currency purchases by individuals with no specific purpose reached US$8.5 billion.<\/p>\n
Christian Naud, senior economist at the research firm ACM, told the Herald that this early-year demand for dollars comes down to several factors.<\/p>\n
On one hand, \u201cthere\u2019s precautionary demand and a rebuilding of dollar portfolios, made easier by the normalization of access to the foreign-exchange market since April of last year.\u201d<\/p>\n
But there are also transactional uses: \u201cCard payments, tourism, services abroad and, in general, greater household demand for imported goods and services,\u201d he said.<\/p>\n
Naud said the real value of the exchange rate \u201chelps explain part of this dynamic.\u201d<\/p>\n
When the dollar is \u201clagging\u201d in real terms, it becomes cheaper for the middle and upper classes it loses value against the peso, which fuels demand.<\/p>\n
Naud noted that in May, the dollar\u2019s real value sat just below its May 2017 levels and 11% below the January-April 2018 average.<\/p>\n
That reference is no accident: April 2018 marked the start of the currency crisis that would end with Argentina\u2019s return to the IMF, triggered by a heavy outflow of foreign capital that had been in the country doing carry trade cashing in on high peso yields.<\/p>\n
Looking ahead to next year, Naud said \u201cprecautionary demand can be expected to gain weight as the 2027 election starts to come onto the market\u2019s radar.\u201d<\/p>\n
For years, pre-election periods in Argentina have come with a surge in dollar demand a time-honored defensive strategy by savers against inflation volatility.<\/p>\n
In September 2025, for instance the month of the Buenos Aires Province election, in which Milei was defeated Argentines bought US$5 billion, the most since 2018.<\/p>\n
Naud expects similar pressure on the dollar in the run-up to the October 2027 presidential election.<\/p>\n
\u201cUncertainty over the continuity or reversal of the current economic program will probably increase dollar hedging,\u201d he added.<\/p>\n
A brief history of Argentina\u2019s dollar \u2018obsession\u2019 Horacio Augusto Pereira, senior researcher at the Center for International Strategies of Governments and Organizations (CIG) at Universidad Austral, told the Herald that the Argentine economy suffers from \u201ca chronic disaster: high inflation, devaluations every other minute, distrust of the peso.\u201d<\/p>\n
\u201cWhat do people do in the face of that? Rationally, they take refuge in dollars to survive,\u201d he said. \u201cEvery time inflation takes off, demand for dollars to hoard goes up. That drains reserves, pressures the exchange rate and ends up creating the very scarcity we then try to manage with currency controls.\u201d<\/p>\n
Economic historian Julin Zicari told the Herald that until the 1930s, the U.S. dollar \u201cwas just another currency\u201d the pound sterling and even gold mattered far more.<\/p>\n
That would change after World War II, as the United States cemented its position as the dominant Western superpower.<\/p>\n
Locally, the shift took hold because \u201cArgentina\u2019s economic crises, from the second half of the 20th century onward, would be tied to a shortage of dollars.\u201d<\/p>\n
Economic sociologist Ariel Wilkis told the Herald that \u201cover the past eight decades, Argentines\u2019 relationship with the dollar has changed over time,\u201d and pointed to a handful of moments that steadily pushed the dollar to the center of economic life.<\/p>\n
He singled out \u201cthe great devaluation of the 20th century the 1958 one, under Arturo Frondizi\u2019s government,\u201d adding that \u201cthroughout the 1960s, devaluations were constant.\u201d<\/p>\n
Frondizi devalued the peso by 68.2% in late 1958, sending inflation past triple digits 113% for the first time in Argentine history.<\/p>\n
Another moment Wilkis highlighted was the last military dictatorship, a period that combined \u201ca policy of economic opening\u201d with \u201ca huge availability of dollars in the financial system.\u201d<\/p>\n
A new turning point came with the hyperinflation under Ral Alfonsn\u2019s government in 1989. Wilkis said that crisis \u201cspread the use of the dollar to extreme levels in everyday payments, for example\u201d and \u201ccreated the conditions for the convertibility policy of the following decade,\u201d which pegged the peso one-to-one to the dollar.<\/p>\n
Under Carlos Menem\u2019s presidency, through the 1990s and until January 2002, Argentina lived under that convertibility regime, in which one peso was worth exactly one dollar.<\/p>\n
\u201cThe paradox of that decade is that, on one hand, the dollar disappears from public life the currency peg means we stop paying attention to it and at the same time it becomes a formalized currency in financial life: opening dollar bank accounts, taking out dollar loans, paying debts in dollars, and so on,\u201d Wilkis said.<\/p>\n
The sociologist noted that while other countries have gone through crises similar to Argentina\u2019s, they didn\u2019t necessarily turn the dollar into a \u201cpopular currency.\u201d<\/p>\n
The Argentine difference, he argued, rests on two complementary dynamics: one sociopolitical, the other sociocultural.<\/p>\n
The first is \u201ca systematic accumulation of failures by governments, decade after decade, to build a strong national currency.\u201d<\/p>\n
The second is \u201cthe social learning around the importance of the dollar how to use it, how to read it, and how to gain a financial edge from it,\u201d the product of one economic crisis after another.<\/p>\n","protected":false},"excerpt":{"rendered":"
Since taking office in late 2023, Javier Milei has tried, in more ways than one, to get Argentines to pull their dollars out from \u201cunder the mattress\u201d that is, to bring them into the formal economy. The first initiative was the Asset Regularization Regime, a tax amnesty that allowed Argentines to declare previously hidden assets. […]<\/p>\n","protected":false},"author":261,"featured_media":76543,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3028,19674,42],"tags":[19672,19673,96],"class_list":["post-76542","post","type-post","status-publish","format-standard","has-post-thumbnail","category-dollars","category-dollars-under-the-mattress","category-economics","tag-dollars","tag-dollars-under-the-mattress","tag-economics"],"_links":{"self":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts\/76542","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/users\/261"}],"replies":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/comments?post=76542"}],"version-history":[{"count":0,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts\/76542\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/media\/76543"}],"wp:attachment":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/media?parent=76542"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/categories?post=76542"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/tags?post=76542"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}