Milei and Caputo bet on retail dollarization to boost the economy

President Javier Milei and Economy Minister Luis Caputo announced that the Government's economic priority is to accelerate the so-called "retail endogenous dollarization," with the aim of facilitating the circulation of dollars that Argentines have outside the system.

Within the framework of the 11th Latam Economic Forum in Parque Norte, the president and the head of the Ministry of Economy reaffirmed their commitment to this strategy, which seeks to boost consumption and encourage credit, according to Infobae's reconstruction.

A "bottom-up" dollarization

The concept of "retail dollarization" emerged from a businessman who, during the event, interpreted the official plans as an attempt to "dollarize from the bottom up," that is, from the common citizen. "The big players will wait for a bit more legal security," he explained, reflecting a view shared by the business community.

The Ministry of Economy confirmed that they are working on a decree aimed at easing controls on the use of undeclared dollars, as long as they have a specific consumption destination. It won't be a classic amnesty, as there will be no declaration or deposit regime for dollars. The idea is to reduce the information requirement for these cases.

What legal margin the Government has

There are two regulatory frameworks that limit these initiatives: the criminal tax law and the exchange law, which can only be modified via Congress. Therefore, the Executive is considering other alternatives, such as reducing the rigor in ARCA's reporting regimes or instructing the Central Bank and the tax authorities not to report minor operations.

"The principle of opportunity in criminal law can be applied," explained Sebastián Domínguez from SCD Asesores. This would allow the Public Prosecutor's Office to decide not to proceed in cases of little relevance, based on criminal policy criteria.

Milei and Caputo: mobilizing dollars "without leaving fingerprints"

Javier Milei was blunt: "We want people to bring in the dollars, buy whatever they want, and not leave fingerprints so they won't be pursued later." According to the president, there are between 200,000 and 400,000 million dollars stored in Argentina, money that could feed the economic circuit if obstacles are removed.

"Those who put the dollars under the mattress are not criminals," Milei insisted, highlighting that the remonetization will be endogenous and gradual, with coexistence between the peso and the dollar.

Luis Caputo complemented the idea: "Why not use them?" he asked, referring to the dollars outside the system. The minister emphasized that as inflation decreases, the demand for money grows, which paves the way for the return of credit.

"The Executive will not issue dollars, but will facilitate the existing ones to start circulating in competition with the peso," Caputo concluded.