DistantNews
Support us
Dollar credits for companies: how it would impact the real estate market
🇦🇷 Argentina /Economy & Trade

Dollar credits for companies: how it would impact the real estate market

From La Nación · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News Sources not specified New plan
  • Argentina's Economy Minister Luis Caputo announced new measures to encourage banks to lend dollars to businesses, aiming to boost the real economy and construction sector.
  • The government is also considering using funds from the Sustainability Guarantee Fund (FGS) to provide long-term financing for banks and expand the mortgage market.
  • While developers welcome the initiative, they caution that it may not lead to an immediate reactivation of projects due to developers' unfamiliarity with bank financing structures.

Argentina's Economy Minister Luis Caputo has unveiled a new policy aimed at channeling dollars from bank deposits into the real economy, with a particular focus on benefiting the construction sector. The measure allows banks to use a portion of their foreign currency deposits to finance companies, even those earning revenue in pesos, a practice that has been heavily restricted since 2001. This initiative seeks to stimulate economic activity and employment.

We are extending it to all companies.

— Luis CaputoThe Economy Minister announces the scope of the new dollar credit measure for businesses.

Caputo also confirmed that the government is exploring the use of resources from the Sustainability Guarantee Fund (FGS) to create long-term funding for banks. This could potentially expand the mortgage market, addressing a key challenge for long-term lending. However, the minister clarified that the FGS would not directly purchase mortgages originated by financial institutions.

"We are extending it to all companies," Caputo stated during a press conference, indicating that banks can allocate up to 15% of their dollar deposits to these operations. The scheme includes special capital requirements and credit exposure limits. While not exclusively for real estate, Caputo highlighted the construction industry as a primary target, noting that it "sells in dollars and generates employment."

This points to a higher level of credit, mainly for the construction industry, which sells in dollars and generates employment.

— Luis CaputoCaputo explains the intended impact of the new credit measures on the construction sector.

Developers have responded positively to the announcement, viewing it as a step in the right direction. Damián Tabakman, president of the Chamber of Urban Developers + Association of Housing Entrepreneurs (CEDU+AEV), expressed optimism, stating the measures are "well-intentioned" and that the sector is "proud to have contributed our bit to get this moving." However, Tabakman cautioned that many Argentine real estate developers are unaccustomed to bank financing and may not have the necessary structures in place, suggesting that an immediate reactivation of projects is not guaranteed.

The measures are in the right direction, they are good, we love them and we are proud to have contributed our bit to get this moving.

— Damián TabakmanThe president of CEDU+AEV expresses positive reception to the government's new economic initiatives.
DistantNews Editorial

Originally published by La Nación in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

More Stories

From Our Blog