Argentina eases post-2001 dollar loan curbs to boost economy

Argentina's Central Bank is loosening long-standing limitations on dollar lending, enabling banks to provide foreign-currency credit to companies generating revenue in pesos. President Javier Milei's administration aims to stimulate credit and economic activity through this measure. Banks can now lend up to 15% of their dollar deposits, currently valued at approximately US$5.8 billion, to such companies.

This change reverses one of the financial measures implemented after Argentina's 2001 economic crisis, which predominantly restricted dollar credit to exporters and firms with foreign-currency income. The government is responding to industry demands to expand credit access. The International Monetary Fund endorsed the decision, with Deputy Economy Minister José Luis Daza noting that foreign-currency deposits have grown to nearly US$40 billion following a tax amnesty and similar initiatives.

Milei's administration anticipates this shift to deepen bank lending and tap into undeclared dollar savings within the formal economy, which have surged following his administration's initiatives. To glean the full benefits, the government seeks to incentivize Argentines to deposit undeclared savings into banks, potentially increasing deposits and reducing peso borrowing costs.