Bloomberg — Argentines have withdrawn a little more than $1 billion in dollar deposits from the country’s banking system over the past seven weeks, as the government struggles to convince them that their currency will stabilize.
Savers started pulling out their dollars from bank accounts at a fast pace when former Economy Minister Martin Guzman resigned on July 2, plunging the government deeper into crisis. Argentina’s third economy minister since then, Sergio Massa, enjoyed a brief market rally upon arrival before deposits declined again.
While some dollar deposits make up a portion of Argentina’s foreign reserves, which are also in decline, they’re not considered part of the central bank’s net reserves because they typically can’t be spent to prop up the currency.
Total deposits have fallen to $14.55 billion as of Aug. 16, central bank data shows, less than half the peak level of about $32 billion seen in 2019 before a primary vote showed President Alberto Fernandez would go on to win the election. Argentines withdrew several billions of dollars in deposits between that vote and Fernandez’s inauguration.
Deposits offer an almost real-time pulse of Argentines’ economic expectations. In late 2001 during one of the country’s worst crisis, the government banned large ATM withdrawals, helping to fuel social chaos.