President Javier Milei has made progress in formalizing undeclared savings, with nearly 300,000 Argentinians declaring over US$20 billion in a tax amnesty program. However, the end of the CERA account immobilization period on January 1, 2026, poses a key test for confidence in his economic management. Analysts warn that changing the 'under the mattress' savings culture will take years.
After decades of financial crises, Argentinians have developed the habit of keeping dollars in cash outside the banking system, from under the sofa to hideouts in convents, as one ex-politician did with nuns' help. The 2001 collapse, when dollar deposits were converted to pesos, deepened this distrust. Recently, in October, a market liquidation sparked a rush for dollars amid pre-election fears.
Under Milei's administration, which began two years ago, private sector dollar deposits in the financial system have more than doubled to US$36 billion, the highest level since the 2002 bank run. This accounts for only a fraction of the estimated US$204 billion held outside banks, per a Central Bank report from last year. The tax amnesty program attracted nearly US$24.5 billion into CERA accounts, with deposits over US$100,000 required to remain immobilized until January 1, 2026, to avoid taxes.
Congress recently passed the Ley de Inocencia Fiscal, raising thresholds for pursuing tax evasion and encouraging the use of undeclared funds. Economy Minister Luis Caputo estimated nearly US$200 billion under mattresses that could generate interest and credit. 'Changing the 'under the mattress' culture in Argentina will take years,' said Sebastián Domínguez of SDC Asesores Tributarios.
Milei's party won the legislative elections and secured support for the first annual budget in years, as inflation fell and devaluation rumors faded. However, brokers like Walter Stoeppelwerth of Grit Capital warn of potential capital flight abroad once restrictions lift. Pilar Tavella of Balanz sees the deposit increase as a confidence signal, though expecting contained movements.
