Bank credit in US dollars in Argentina has reached record levels, exceeding US$20 billion, with a significant increase during Javier Milei's administration.
In Argentina, bank credit in dollars has surged to unprecedented levels, amassing over US$20 billion, an increase attributed to recent economic policies implemented by President Javier Milei. The total amount of dollar-denominated loans has surged by over 5.5 times since Milei took office, reflecting a strong demand from the private sector. As of now, this stock represents an 8% growth since the beginning of the year, highlighting an increasing trend in borrowing in foreign currency amid ongoing inflationary pressures.
The recent peak of US$20.054 billion marks a significant milestone, surpassing the previous record of US$16.616 billion seen in May 2018. This prior peak was just before the start of an economic crisis that defined former President Mauricio Macri's term, suggesting that the current figures have emerged amid more favorable conditions for lending and borrowing in the peso-pegged economy. The growth in dollar-denominated loans comes as Argentine businesses seek stability and mitigate the effects of inflation by borrowing in a stronger currency.
Milei's administration has focused on stimulating economic growth and easing borrowing conditions, which is reflected in the dramatic rise of bank credit in dollars. Institutions have responded favorably to these policy changes, resulting in increased lending capabilities. However, this growth also raises questions about the sustainability of such lending practices in a volatile economic environment, which could have future implications on Argentina's financial stability and foreign exchange reserves.
