President Javier Milei’s government has postponed the announcement of new measures designed to encourage savers to bring their stashed dollars back into the formal economy.
After trailing the announcement for the last couple of weeks, Presidential Spokesperson Manuel Adorni said Thursday that the “economic announcement the National Government had prepared for today has been postponed.”
He said the goal is to prevent political opponents from having the opportunity to "accuse a package of transcendental measures for all Argentine savers of being electioneering" – a nod to Adorni’s run as a candidate in the Buenos Aires City Legislature elections taking place Sunday.
According to reports, the new economic measures will be announced after this weekend’s election.
The Milei government wants to encourage residents to spend their offshore or cash savings and inject them into the formal banking system. To that end, it has repeatedly put out messages stating that there will be no investigation by regulatory agencies into money outside the traditional economy.
However, the scheme will require a series of legal amendments to prevent it from being an explicit "whitewash" or amnesty, who would require formal consideration in the National Congress.
Several analysts have predicted changes to the income tax system may also be forthcoming.
Earlier this week, Economy Minister Luis ‘Toto’ Caputo confirmed that his officials are working on a series of deregulatory measures that will facilitate the use of dollars for domestic expenses without having to explain the source of the funds.
"What we're going to do more of is make people more inclined to take their dollars out of their mattresses, safety deposit boxes, or wherever and spend them," said Caputo. "The idea is not to give explanations about what you spend, beyond the fact that it wasn't banked. It's a cultural change that needs to be explained clearly.”
While details of the scheme remain unknown, some experts have already sounded warnings about the Milei administration’s “ambitious plan.”
Economist Nau Bernues, the CEO of Quanestus, told the Noticias Argentinas news agency on Thursday that it remains to be seen how the average Argentine – which for the most part is sceptical and cautious about its savings – will react.
“What the government is proposing is very ambitious,” he said, indicating that “those who have the dollar under their mattress or in their safety deposit box, which is their insurance, perhaps their life savings, are not going to touch it for anything, except if they make it much easier to purchase land, real estate and assets that the average Argentine assigns a certain amount of protection to.”
However, Bernues said "the government wants to go further and make the dollar a more transactional currency, allowing people to buy not only an apartment or a car, but also an appliance or even a cookie at a kiosk.”
He concluded: "The government wants Argentines to put dollars into circulation. It's doing everything possible to ensure that there are more and more dollars. If that happens with constant pesos or no issuance, the exchange rate should appreciate. That's why the economic team is constantly proclaiming that the dollar will go to 1,000 [pesos per greenback]."
– TIMES/NA
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