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Argentines have US$250 billion stashed outside financial system, says INDEC

Contributing to this total are deposits in bank accounts abroad, domestic safes or hidden “under the mattress”, stocks and bonds.

Argentines have about $ 250.4 billion stockpiled outside the domestic financial system, according to the national statistics office at INDEC.

The figure, corresponding to the last quarter of 2020, was included in the Bureau’s recent report on “Balance of payments, international investment and external debt” under “Other investments”.

Deposits in bank accounts abroad or kept in domestic safes or hidden “under the mattress” contribute to this total.

That sum is more than six times the Central Bank’s foreign currency reserves (which closed at $ 39.387 billion last year).

Economists attribute this behavior to decades of instability, recession, inflation and expropriations that undermine confidence in the peso as a reserve currency and the local financial system as a safe place to deposit savings.

In relation to the third quarter of 2020, this sum increased by US $ 3.057 billion or 1.2%.

Economists warn that keeping money out of the local financial system hinders development because there can be no unsaved loan system, as well as weakening the Central Bank’s position.

Other channels have also emerged to reflect capital flight and the decision to invest abroad.

According to INDEC, Argentine “direct investments” abroad amount to US $ 40.709 billion. This item covers real estate, cars and any other type of asset or commodity, increasing by US $ 295 million (0.07 percent) in the last quarter.

“Portfolio investments”, including funds in stocks, bonds or any other type of financial asset, total $ 69.73 billion, an increase of $ 4.029 billion (6.1%) over the third quarter of last year .

At the end of 2020, foreign debt reached US $ 271.505 billion, according to INDEC.

Debt, therefore, fell by US $ 1.347 billion between quarters, with almost two-thirds (66%) denominated in dollars (US $ 178.132 billion).

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