Impatient savers are hindering Milei’s lending push in Argentina

President Javier Milei has persuaded Argentines to put their savings back into banks. Convincing them to keep their money there for more than a few months is proving harder.

Certificate deposits in pesos from the private sector – including individuals and companies – are growing 45.1 percent from a year ago, while dollar deposits are at the highest level since 2001 as both categories outpace annual inflation at 34 percent. It’s a significant feat in a nation where savers tend to keep their money buried under the mattress.  

Yet the maturity of those savings is shrinking: Argentines now keep just about four percent of their peso deposits in maturities longer than 90 days, roughly half the share seen a year ago. That shortening is becoming a key constraint for banks trying to expand longer-term credit. With roughly 95 percent of bank funding maturing within three months, lenders have limited room to extend loans over much longer horizons.

“There isn’t much appetite for very long-term fixed deposits in Argentina,” said Juan Carlos Barboza, head of research at Banco Mariva SA in Buenos Aires. “It’s not easy to go long with a time deposit because you don’t have the liquidity you can get with bonds.”

The mismatch is becoming a broader obstacle to Milei’s recovery as the government seeks to stimulate lending to kickstart more economic activity and hiring. The Central Bank is injecting more liquidity into Argentina’s financial system in an effort to keep rates low after a surge of borrowing costs last year to contain a peso sell-off at the time. 

Yet since he took office, peso lending to the private sector has barely increased relative to gross domestic product, while short-term funding limits banks’ ability to finance investment and other longer-duration spending.

That matters as growth remains uneven and employment weakens ahead of the 2027 election. Argentina has lost about 241,000 private-sector salaried jobs since Milei took office, making the government’s ability to turn stabilisation into credit, investment and jobs increasingly important to both the economy and his re-election prospects. 

The shift to shorter-term deposits also shows that while confidence in the financial system has improved under Milei, savers remain reluctant to lock up their money for extended periods in a country with a long history of inflation, devaluations and abrupt policy changes. Savings appear to have become increasingly constrained by renewed uncertainty in recent months over Milei’s political strength after maturities had extended in the first half of the President’s term. 

Deposit maturities have lengthened at moments when Argentines felt more confident about currency stability and could earn attractive returns by staying in pesos – a dynamic on display in 2024 and early 2025 that’s now reversed.  

Grupo Financiero Galicia, Banco Macro SA and Banco Santander SA are offering longer-term fixed deposits in pesos with yields that fall short of inflation expectations over comparable maturities, potentially leaving savers with negative real returns.

Ahead of next year’s election cycle, lingering uncertainty over the peso’s stability and Milei’s prospects give depositors more reason to stay short. When investors suspect the currency may weaken, they tend to avoid locking money away for months, since a depreciation can quickly wipe out the extra yield from a longer-term deposit.

“If people get scared by electoral uncertainty and that leads to increased dollarisation of savings, we are going to see deposit outflows and higher interest rates, and all of that will affect the supply of credit,” said Fernando Baer, chief economist at local consultancy Quantum Finanzas.