(Bloomberg) -- Argentina’s government is pushing banks to expand dollar lending to more sectors, Economy Minister Luis Caputo told a closed-door event at the Buenos Aires Stock Exchange.
Caputo wants loans to companies and mortgages to be offered in US currency, he said Wednesday alongside central bank official Federico Furiase, according to two people with direct knowledge who asked not to be named in discussing private remarks.
The initiative aims to capitalize on the surge of dollar inflows stemming from the government’s recent tax amnesty program. Over the past five months, Argentines deposited more than $20 billion in local banks. Current regulations only allow dollars to be lent to companies earning revenue in foreign currency.
Caputo assured attendees of the stock-exchange event that dollars would be plentiful in Argentina as the energy and mining sectors take off under President Javier Milei’s free-market reforms, the sources said.
Milei, who campaigned on dollarizing the economy but has taken a largely hands-off approach to doing so since taking office, signaled last week usage of the US currency would increase, including in everyday transactions.
“From now on, every Argentine will be able to buy, sell and get paid in dollars, or in the currency he or she prefers, except for the payment of taxes,” the president said Dec. 10 in a televised address.
The libertarian, who also promised to close Argentina’s central bank, has essentially left it Argentines to dollarize for him. The strategy, dubbed endogenous dollarization, hinges on restricting the supply of pesos so that Argentines must use their dollar reserves to pay for everyday expenses.
Caputo also flagged ongoing discussions with the real estate industry to establish dollar-denominated mortgage programs used in his remarks Wednesday, according to the people. Furiase said the government’s goal is to support the growing use of the dollar while maintaining stability in the financial system, the sources added.
The minister had previously said the government is focused on remonetizing the economy, both in pesos and dollars. “We want people to use their dollars because that reactivates the economy, generates more income and allows us to lower taxes,” Caputo said in September.
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