The strategy worked—briefly.
Just a few months later, on June 4, 1975, Argentina’s Economy Minister at the time, Celestino Rodrigo, announced a package of economic measures that led to a devaluation of the peso by more than 100%.
Shocked by the situation, Rubén rushed to withdraw his money from the bank. But what he got back was barely enough to buy a car, when he had originally deposited the equivalent of a house.
The economic plan, known as the “Rodrigazo,” convinced Rubén and many other Argentines that the safest way to save money was in U.S. dollars, not in a national currency that had become known for losing value.
“In Argentina, we don’t trust our currency. After decades of steep devaluations, we know that those who saved in pesos over the past 50 years lost out compared to those who saved in dollars,” economist Guido Zack told BBC Mundo.
But saving in dollars and depositing them in banks turned out to be no guarantee either.
In 2001, during one of the country’s worst economic crises, then-Economy Minister Domingo Cavallo imposed restrictions on dollar withdrawals from bank accounts.
This measure, known as the “Corralito,” led to the collapse of the government at the time and a forced conversion of dollar savings into pesos at an unfavorable exchange rate.
The distrust in the peso was soon accompanied by distrust in the banking system, prompting many savers to hide their “greens” (as dollars are called in Argentina) at home for future use.
Thus was born the expression: “under the mattress,” a practice that quickly became a widespread habit among Argentines.
In early 2002, thousands of angry Argentines pounded on their banks' doors, demanding to withdraw their savings.
Argentina’s National Institute of Statistics and Censuses (INDEC) estimates that around US$246 billion are currently outside the country’s banking system, according to its 2024 report Balance of Payments, International Investment Position and External Debt.
That figure far exceeds the Central Bank of Argentina’s international reserves, which are around US$38.3 billion, and represents about 45% of the country’s GDP.
That’s why President Javier Milei’s government is now seeking to bring those dollars back into the system.
“Those who have dollars under the mattress are the heroes who are going to pull this country forward,” Milei declared at the Argentine Economic Congress this past April.
“You didn’t put dollars under the mattress because you hate this country. You did it because, on the other side, there was a gang of crooks who stole from you through inflationary taxes,” he added.
“Under the Mattress”
In that direction, the government announced in mid-May a plan that allows people with undeclared savings to use that money to buy a property worth up to US$43,000 or place up to US$85,000 in fixed-term deposits at banks without having to justify its origin.
“This new regime aims to restore freedom to the people and stop thinking that those who sought refuge in the informal market are criminals,” said Economy Minister Luis Caputo.
The measure follows a successful US$22.5 billion capital amnesty last year and a new US$20 billion loan from the International Monetary Fund (IMF).
“I’ve been told—though I don’t know if it’s true—that there are over US$200 billion under the mattress and who knows where else. If that money were invested in Argentina, imagine what the country could become,” said IMF Managing Director Kristalina Georgieva during an event with lawmakers in Washington.
But what exactly are Argentines referring to when they talk about “dollars under the mattress”? And what does this say about the country’s chronic dollar shortage?
Milei described people with undeclared dollar savings in Argentina as “heroes who will pull this country forward.”
Santiago, a 37-year-old restaurant owner, says he has never deposited his savings in a bank. Like many Argentines, his stance is shaped by decades of family experience.
“My dad lost US$40,000 overnight in the 1990s when his bank suddenly closed. Then in the 2001 crisis, another bank wouldn’t let him access his savings. I don’t want that to happen to me,” he says.
The expression “dollars under the mattress” refers to undeclared U.S. dollar savings that are outside the financial system. These can be hidden at home, kept in safe deposit boxes, or even held in offshore accounts.
“Our way of protecting ourselves from devaluation and inflation is by saving in foreign currency—and saving in physical dollars. Some of us literally put those bills under the mattress, which is just a euphemism for hiding them at home,” says Guido Zack, Director of Economics at the research center Fundar.
According to Zack, the incentives to deposit pesos in banks don’t compensate for chronic inflation. Therefore, fixed-term deposits in pesos often aren’t profitable enough.
“In recent years, saving in the local currency through the financial system hasn’t been the most convenient option for Argentines. But that has to change if we want to stabilize our economy,” he adds.
Economic Impact
This practice creates major problems for Argentina’s economy.
The country has suffered constant cycles of stagnation, largely due to a chronic shortage of U.S. dollars.
“Our banking system is missing those US$250 billion from Argentines that are outside the system,” Zack says.
This absence of dollars in the banking system translates into a lack of international reserves at the Central Bank—reserves the country needs to import goods and drive economic growth.
For the past half-century, Argentines with the ability to save have bought dollars to protect themselves from the peso’s depreciation.
But by saving in dollars, Argentines essentially remove those funds from the economic cycle. They’re not used for consumption or investment—they’re “idle dollars.”
“And that’s a major issue for the Argentine economy,” explains Zack.
If every person with savings capacity chooses to remove their dollars from the system instead of investing them in the local economy, there will be far fewer resources to lend to companies, says Zack.
It also leaves the Central Bank with fewer dollars to build reserves and stabilize the exchange rate—one of Argentina’s most pressing economic problems over the past decade.
“Your Dollars, Your Decision”
To bring back these much-needed dollars, the Milei administration launched a plan that allows the use of undeclared money to buy property or deposit in banks without asking about its origin.
“Your dollars, your decision,” presidential spokesperson Manuel Adorni announced in a press conference on May 22.
“What’s yours is yours, and you can spend it however you want without constantly having to prove where it came from. Argentines are once again innocent until the Tax and Customs Agency proves otherwise,” he added.
“This new regime aims to restore people’s freedom and stop treating those who had to rely on the informal market as criminals,” echoed Economy Minister Luis Caputo.
The measure, announced just five months before Argentina’s midterm elections, has stirred controversy.
“Where are the incentives? It seems like if you play by the rules, you’re punished, and if you don’t, you’re rewarded. The incentives are completely misaligned,” said the restaurant owner interviewed by BBC Mundo, referring to the policy allowing the legalization of undeclared money.
Dollarization has been one of the key proposals in Milei’s presidential campaign.
“The relaxation of financial disclosure could end up encouraging informality. If the state can’t verify the origin of that money, people might think: ‘Why should I pay my taxes?’ And that’s a very selfish attitude—totally contrary to a country’s sense of solidarity,” says Zack.
For its part, the IMF’s Director of Communications Julie Kozack reminded that Argentina has pledged “to strengthen financial transparency and adhere to anti-money laundering standards.”
“Any new measure aimed at encouraging the use of undeclared assets must be consistent with these commitments. All I can say now is that we are watching developments very closely,” she warned.
The Milei government is making every effort to draw those dollars out from under the mattress—a goal shared (and largely unfulfilled) by nearly every Argentine president since the 1980s.
The real question remains: are the right incentives finally in place for Argentines to regain trust in their banks—and, ultimately, in their own currency?
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