"Argentine Government to Reveal 'Dollars Under the Mattress' Plan This Week"

# Argentina's Milei Administration Eyes "Under-the-Mattress Dollars" to Tackle Economic Challenges ### Majority of Citizens Save in Dollars Amid Economic Instability; Unreported Assets Estimated at $271.2 Billion (BUENOS AIRES, Yonhap News Agency) – The Javier Milei administration is set to reveal its strategy this week to tap into the vast pool of unreported private assets known as "under-the-mattress dollars," according to Argentine media outlet Perfil on November 11 (local time). ### Understanding "Under-the-Mattress Dollars" “Under-the-mattress dollars” refer to cash reserves Argentinians hold outside the formal banking system, often due to a lack of trust in domestic banks, stringent foreign exchange regulations, and difficulties in legally acquiring U.S. dollars. This category includes black market cash due to government restrictions, undeclared funds evading taxation, assets stored in safety deposit boxes at domestic banks, or held in overseas private accounts in tax havens. Argentine citizens are estimated to hold around $271.2 billion (approximately 379 trillion won) in unreported dollar-denominated assets. ### A Legacy of Economic Crises For decades, Argentina has been plagued by economic crises, including hyperinflation and currency devaluation, leading its citizens to favor saving in U.S. dollars over the peso. Real estate transactions in Argentina are often conducted in dollars, underscoring its dominance in the local economy. Historically, unreported dollar assets become a focal point for governments during political transitions. Successive administrations have implemented financial amnesty programs, or "blanqueo," to legitimize these hidden funds in exchange for exemption from past tax liabilities. ### The Milei Administration's Plan Having achieved noteworthy success with a blanqueo program launched in September last year, the Milei administration is planning a new approach. This week, it aims to introduce a mechanism allowing citizens to use unreported cash assets without undergoing traditional amnesty processes or facing tax compliance risks. The move comes as Argentina recently secured a $20 billion loan package from the International Monetary Fund (IMF), adding urgency to its economic stabilization efforts. ### Economic Implications Economy Minister Luis Caputo has emphasized that reintegrating these “under-the-mattress dollars” into circulation could stimulate domestic consumption, particularly in the real estate, automotive, and consumer electronics sectors as these dormant assets re-enter the economy. Argentine analysts argue that the government aims to leverage these funds to shore up foreign exchange reserves. If unreported dollars are introduced into the formal system, the increased liquidity could strengthen the peso and narrow the exchange rate gap. Perfil's report suggests that by purchasing these dollars when the peso-dollar rate nears the lower bound of the government-defined exchange band (1,000 pesos per dollar), authorities could bolster foreign reserves and mitigate inflationary pressures with a stronger currency. ### Addressing Future Debt Obligations Economic experts referenced by Perfil indicate that the urgency in addressing unreported assets also stems from looming debt repayment pressures. Argentina faces foreign debt obligations of $25 billion (approximately 35 trillion won) due in 2026. While current foreign exchange reserves, bolstered through IMF loans and other international financing agreements, are sufficient to cover repayments due through January of next year, Argentina may need additional resources like the "under-the-mattress dollars" to service its substantial external debt. This forthcoming policy from the Milei administration represents a critical step toward addressing Argentina's persistent economic vulnerabilities and ensuring its financial stability.