Why Argentines Keep Hoarding Dollars Even as the Peso Steadies

ARGENTINA · ECONOMY

Inflation is falling, the exchange rate is stable and the parallel dollar has lost its old menace — yet Argentines are still moving money into dollars at one of the fastest paces on record, a habit decades in the making that quietly works against the government’s reserve drive.

The scale of Argentines hoarding dollars

Argentines have always treated the US dollar as a store of value, but the numbers behind the current wave are striking. Between the start of 2024 and the middle of 2026, households and companies channelled roughly $39bn into foreign currency, according to central-bank data processed by Profit Consultores and reported by La Nación.

The bulk — about $32bn — went out in 2025, and although the monthly pace slowed after the government’s strong showing in the October midterm elections, a further $9bn or so had already left in the first four months of 2026.

In the jargon of Argentina’s balance of payments, this is “external asset formation,” the line that captures private purchases of dollars for saving rather than spending. It is the single largest source of dollar demand on the financial account under President Javier Milei, and it runs directly counter to the central bank’s effort to rebuild reserves.

Every dollar a saver tucks under the mattress or moves abroad is a dollar the monetary authority cannot easily retain.

Why the habit persists despite calm

What makes the trend notable is that it continues even as the surface signals turn reassuring. Inflation, while still high by international standards, has come down sharply from the triple-digit peaks of 2023.

The gap between the official exchange rate and the parallel “blue” dollar — for years a barometer of public distrust — has narrowed to a slim premium. The government loosened the “cepo” capital controls in 2025 and now runs a managed band that adjusts with inflation.

On paper, the case for rushing into dollars is weaker than it has been in a long time.

Yet the behaviour endures, and economists trace it to memory rather than arithmetic. Argentina has lived through repeated devaluations, deposit freezes and policy reversals, and that history has hard-wired a precautionary reflex: when a saver has pesos, the instinct is to convert.

The easing of controls, paradoxically, made it simpler to act on that reflex, since companies regained the freedom to repatriate profits and individuals faced fewer hurdles to buy. Stability, in other words, has not yet rebuilt the trust that decades of crises destroyed.

The government has tried to turn that instinct into an asset. In 2025 it unveiled a plan to coax an estimated $400bn in dollars held outside the formal system — cash kept abroad, in safe-deposit boxes or literally under mattresses — back into circulation, easing reporting requirements in the hope of formalising the savings rather than punishing them.

The very size of that hidden stock underlines how deeply ingrained the dollar habit is, and why officials see rebuilding confidence in the peso as a multi-year project rather than a quick fix.

What it means for the reserve drive

The drain matters because reserve accumulation is the soft spot of Milei’s stabilisation programme. The central bank has been buying dollars aggressively — it crossed its full-year purchase target in only about five months — but it has struggled to keep all of those dollars, partly because private demand keeps pulling them back out.

Morgan Stanley has projected that savers will continue buying heavily through 2026, estimating the bank may accumulate only half its headline goal in net terms and making external loans important to close the gap.

There is a seasonal dimension too. Dollar demand from individuals picked up in April, and market operators expect winter holidays and the 2026 World Cup to lift it further as Argentines travel and spend abroad.

The government’s wager is that “re-monetization” — rebuilding faith in the peso so that people willingly hold more local currency — will eventually slow the outflow. For now, the persistence of dollar hoarding even in calm conditions is a reminder that confidence, once lost, returns slowly, and that the hardest part of Argentina’s recovery may be psychological rather than fiscal.