As economic optimism rises, Javier Milei makes a play for Argentines’ mattress money
Will things be different this time? That’s a question that Argentines have had to ask themselves with disconcerting regularity. Once among the world’s wealthiest nations, the South American country is now better known for its periodic economic crises, of which there have been many over the past 50 years. When the storm clouds clear and the economy starts to pick up steam, its citizens are often left pondering that searching question.
Argentines have grown so accustomed to uncertainty that many store large sums of cash (mostly US dollars) under their mattresses – rainy-day funds for when things take a turn for the worse. Private safety-deposit boxes and jars under the kitchen sink have also proved popular alternatives to banks. Since the election of libertarian Javier Milei as president in 2023, however, the country has become increasingly optimistic about the economy. The unconventional mop-haired leader, who reportedly seeks economic and political counsel from his dogs, has enacted sweeping reforms across everything from fiscal policy and deregulation to privatisation and labour laws. Though it’s still early days, his policies appear to be steering Argentina towards a more stable path. In May, the monthly inflation rate fell below 2 per cent for the first time in five years.
Now, Milei is putting this cautious optimism to the test. Last month the government announced that it would scrap elaborate rules aimed at preventing tax evasion and monitoring personal wealth. The goal? To coax an estimated $270bn (€230bn) of so-called “mattress dollars” back into the economy. Under the president’s scheme – officially dubbed the “Historical Reparation Plan for Argentines’ Savings” – citizens will be able to deposit dollars into bank accounts without fear of penalties or investigations into the source of their wealth. The government has tried to frame the move as part of a broader cultural shift in how it engages with the people. Or, as one lawmaker put it, “There will be no more persecution [of Argentines] as if they were Al Capone.”
The goal of the policy is to remonetise the economy and boost Argentina’s foreign reserves, which remain perilously low. Officials hope that the increased dollar circulation will stabilise the peso and boost fiscal activity. Whether or not the campaign succeeds, however, depends on whether Argentines can trust a banking system that has burned them many times before. The “mattress dollars” legislation is currently winding its way through Congress. Next up are legislative elections scheduled for October. If voters signal their satisfaction with Milei and hand his right-wing coalition a thumping victory, the stage will be set for deeper reforms. Crucially, the average Argentine might sleep better at night knowing that their cash is safely stowed away in a bank and not hidden under their bed.
Harris is a Monocle contributor based in São Paulo. For more opinion, analysis and insight, subscribe to Monocle today.
