Argentines demand US dollars but don’t trust nation’s banks for safekeeping

Last week, Argentina began to allow its citizens to purchase US dollars through official channels for the first time in two years.

9 Total views
0 Total shares
Argentines demand US dollars but don’t trust nation’s banks for safekeeping

Last week, Argentina began to allow its citizens to purchase US dollars through official channels for the first time in two years.

Black-market dollars have been around for some time, but the move seems to be an attempt by the government to bring Argentines a little stability in their personal wealth.

But many Argentines don’t see it the same way.

After Argentina’s economy collapsed in 2001, whole classes of society had their savings wiped out. The peso was unpegged against the dollar, and inflation has since been rampant. Current annual inflation is about 26%.

The problem for Argentina is the people feel they have little reason to put their trust in the official economic and banking systems.

"Put my dollars in a bank account? Not on your life!" one person called in to say on Radio Mitre, a station that frequently lampoons the populist politics of President Cristina Kirchner. “This is a trap. They want to rob us.”

The Argentine government isn’t exactly earning back trust with its efforts, either.

As of last Monday, Argentines could now buy up to $2,000 in hard currency as a hedge against inflation. The government will allow anyone to exchange up to 20% of his or her paycheck into another currency. The money must then be deposited into a bank.

To compound resentment, the government has thus far only agreed to disburse about $120,000 of the $72 million demanded by residents.

All of the capital controls under President Kirchner have been attempts to rein in the money pouring out of the country, as investors seek safer harbors for their wealth.

"It's a farce," said one local business person. "First they don't let you buy the amount of dollars that you'd like, and then they make you deposit them in the bank."

×

Hottest Bitcoin News Daily

For updates and exclusive offers, enter your e-mail below.