Argentine Economists See Risk of Dollar Run; Minister Dismisses Concerns

Argentine economists are sounding alarms about the potential for dollar runs and economic volatility, with particular concern focused on the period leading up to the 2027 elections. They point to the persistent demand for dollars from private citizens as a key indicator of underlying economic anxieties and expectations.

Economist Ricardo Arriazu noted that Argentines purchased $40 billion in dollars over the past year, with demand expected to remain high. Since the government lifted currency controls, individuals have acquired $60 billion, with $13 billion purchased already this year. While this indicates a continued outflow of dollars for savings, it also provides the Central Bank opportunities to purchase foreign currency, having acquired over $13.1 billion this year.

Kristalina Georgieva, head of the International Monetary Fund (IMF), has reportedly encouraged the Central Bank to continue accumulating reserves. Martín Redrado, former president of the Central Bank, suggested that the IMF's interest in reducing its exposure to Argentina underscores the importance of dollar generation, potentially from areas like Vaca Muerta.

Fernando Marull, another economist, has developed a "power of fire" monitor for 2027, detailing government tools to manage dollar demand. These include selling Treasury bonds, using future dollar sales, and adjusting interest rates. Marull's analysis suggests the government has more flexibility than a year ago to intervene and decompress dollar pressure, estimating that $20 billion was needed in 2025 to stabilize the dollar within its band.

However, Economy Minister Luis Caputo publicly dismissed these concerns. In a recent interview, he stated, "I have more information, I know what we are going to do. I do not agree with what the consultants say about next year and an election year. Nothing will happen that people believe." Caputo acknowledged that private demand for dollars persists due to economic reasons and expectations, exacerbated by a favorable international context for Argentina.

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I have more information, I know what we are going to do. I do not agree with what the consultants say about next year and an election year. Nothing will happen that people believe.