Are Argentines worried about a Possible Bank Run (Correlito 2.0)?

[BuySellBA]

Are Argentines worried about a Possible Bank Run (Correlito 2.0)?

Yesterday, banks in Argentina requested USD 70 million in cash from the Central Bank (BCRA) to address potential deposit withdrawals in the coming days. This request reflects growing economic uncertainty and pressure on the financial system.

The demand for physical dollars by savers has increased in the context of a currency run, which has also negatively impacted the country's international reserves.

The BCRA is facing a critical situation, with net reserves in the negative reaching USD -11.978 billion. Although gross reserves amount to USD 25.052 billion, they include assets that are not freely available, such as swaps with China and dollar deposits from private savers. This limits the Central Bank's ability to meet the demand for foreign currency without resorting to extraordinary measures, such as using bank reserves.

In March, the BCRA lost nearly USD 3 billion in gross reserves due to a combination of currency interventions aimed at containing the dollar and increased withdrawals of dollar deposits. The informal ("blue") dollar continues to rise, reaching $1,325, reflecting distrust in the Argentine peso and a growing preference for sheltering in foreign currency.

 

[Uncle Wong]

Are Argentines worried about a Possible Bank Run (Correlito 2.0)?

Yesterday, banks in Argentina requested USD 70 million in cash from the Central Bank (BCRA) to address potential deposit withdrawals in the coming days. This request reflects growing economic uncertainty and pressure on the financial system.

The demand for physical dollars by savers has increased in the context of a currency run, which has also negatively impacted the country's international reserves.

The BCRA is facing a critical situation, with net reserves in the negative reaching USD -11.978 billion. Although gross reserves amount to USD 25.052 billion, they include assets that are not freely available, such as swaps with China and dollar deposits from private savers. This limits the Central Bank's ability to meet the demand for foreign currency without resorting to extraordinary measures, such as using bank reserves.

In March, the BCRA lost nearly USD 3 billion in gross reserves due to a combination of currency interventions aimed at containing the dollar and increased withdrawals of dollar deposits. The informal ("blue") dollar continues to rise, reaching $1,325, reflecting distrust in the Argentine peso and a growing preference for sheltering in foreign currency.

I was wondering about this. Why would you keep dollars in an account right now? Maybe a small amount but why would you keep large amounts in a bank account right now with their negative net cash so negative? It doesn't seem like a smart thing to do. All my friends there said they long since pulled out their cash more than to pay a few months bills.

 

[Betsy Ross]

I was wondering about this. Why would you keep dollars in an account right now? Maybe a small amount but why would you keep large amounts in a bank account right now with their negative net cash so negative? It doesn't seem like a smart thing to do. All my friends there said they long since pulled out their cash more than to pay a few months bills.

I do the same as your friends. It is convenient to keep some so you can exchange from dollars to pesos using MEP rate. But I don't keep large amounts of dollars in my account. I know people that brought in funds with the blanqueo but they have long since pulled all the cash out. Many people still have memories of the corralito and going through the bank run and learned their lesson.

 

[Digital Nomad]

I don't think many people trust the banks too much. Companies have to keep some cash in but my ex-girlfriend's dad said that a lot of biz is under the table with cash.

 

[Johnny]

I was blown away by how much cash people deal with. I never deal with cash in the US! And during my 2 week trip I saw so much cash! The first apartment I bought they were paying me $500 dollars a month rent as part of the deal so it was funny getting there and showing up at the developer and they gave me $2,500. A good way to start out my trip! Many places offered a discount to pay in cash. When I went they only had 1k peso bills so we were paying stacks of cash for each meal.

I work in banking but probably would not trust my dollars in a bank account there in large amounts. Small no problem but people I talked to did not recommend to keep large amounts in the bank. I tried to open an account but I could not because I didn't have residency.

@Darksider415 do you keep big amounts in dollar accounts? Do you feel safe with your money in the account?

 

[Blockchain]

You would have to be dumb to keep large amounts of dollars in an account in Argentina. The economy minister seems desperate! Without that IMF cash they are screwed.

 

[Spend Thrift]

I was wondering about this. Why would you keep dollars in an account right now? Maybe a small amount but why would you keep large amounts in a bank account right now with their negative net cash so negative? It doesn't seem like a smart thing to do. All my friends there said they long since pulled out their cash more than to pay a few months bills. I

Not many keep sizable balance in their account. I talked to many that brought in money from amnesty but they pulled it back out very quickly. 🤣

I finally got my precaria and opened up a bank account and have both peso and dollars but don't keep more than $2k in it.Just transfer in money as needed.

 

[Darksider415]

@Darksider415 do you keep big amounts in dollar accounts? Do you feel safe with your money in the account?

So, my case is slightly unusual because I have a good-paying startup gig that pays me en blanco, depositing the dollars in an account across the river in Uruguay...

I only transfer enough into Argentina to cover expenses and I only put enough dollars in the local account to pay any USD expenses on my local credit cards + pay my rent. All of my actual savings either stay in Uruguay or get sent from Uruguay to one of my US accounts.

 

[Johnny]

So, my case is slightly unusual because I have a good-paying startup gig that pays me en blanco, depositing the dollars in an account across the river in Uruguay...

I only transfer enough into Argentina to cover expenses and I only put enough dollars in the local account to pay any USD expenses on my local credit cards + pay my rent. All of my actual savings either stay in Uruguay or get sent from Uruguay to one of my US accounts.

Congrats on the blanco gig! I was amazed with how many people I met in BA and they get paid on the side or outside of Argentina but not declared to avoid taxes. I met a few freelancers that get paid outside of Argentina to their Wise accounts! Crazy. I wonder how the government will ever expect to fix things when people don't still trust the banking system.

What is the reason for not moving the funds to Argentina? No trust in the banking system? What about if they end the currency controls and you could get wired in your local account would you? I am always curious as I am going to work on getting my residency in Argentina now that I am buying a few properties there. I already bought 2 and looking at another one.

It is interesting to hear that no one really trusts the banks in Argentina. I even saw Caputo keeps all of his savings outside of Argentina. 😛

 

[Betsy Ross]

So, my case is slightly unusual because I have a good-paying startup gig that pays me en blanco, depositing the dollars in an account across the river in Uruguay...

I only transfer enough into Argentina to cover expenses and I only put enough dollars in the local account to pay any USD expenses on my local credit cards + pay my rent. All of my actual savings either stay in Uruguay or get sent from Uruguay to one of my US accounts.

This is what I do. I continue to just bank in the USA. There is no good reason to keep much money in dollar accounts here. I keep a few thousand dollars out of convenience but it will be a while before I trust the Argentine banking system. Things can and do change very quickly here. I think even once the Cepo ends people won't really trust the banks here.

 

[Darksider415]

Congrats on the blanco gig! I was amazed with how many people I met in BA and they get paid on the side or outside of Argentina but not declared to avoid taxes. I met a few freelancers that get paid outside of Argentina to their Wise accounts! Crazy. I wonder how the government will ever expect to fix things when people don't still trust the banking system.

What is the reason for not moving the funds to Argentina? No trust in the banking system? What about if they end the currency controls and you could get wired in your local account would you? I am always curious as I am going to work on getting my residency in Argentina now that I am buying a few properties there. I already bought 2 and looking at another one.

It is interesting to hear that no one really trusts the banks in Argentina. I even saw Caputo keeps all of his savings outside of Argentina. 😛

There's no real reason to move the funds to Argentina when they're perfectly safe in Uruguay, and it's all en blanco and declared anyway so there aren't any complications with ARCA. ARCA gets their cut right off the top, the banks here are pretty much hot garbage for service compared to Uruguay, and everything can change in a moment.

Too much risk, not enough reward.

 

[Wally]

There's no real reason to move the funds to Argentina when they're perfectly safe in Uruguay, and it's all en blanco and declared anyway so there aren't any complications with ARCA. ARCA gets their cut right off the top, the banks here are pretty much hot garbage for service compared to Uruguay, and everything can change in a moment.

Too much risk, not enough reward.

Exactly. Even if they WERE safe (which they are NOT) the the customer service is terrible. I have been here over a decade and never keep large amounts here.

Things right now are touch and go with the banks. Government is very desperate right now. Many of our friends that have dollars in their accounts or brought funds in with blanqueo have pulled out funds recently. Even with the IMF funds if it is 40% dispursement the central bank can easily blow through it quickly.

Better safe than sorry.

 

[Blockchain]

complications with ARCA. ARCA gets their cut right off the top,

How does this work @Darksider415? When it is declared, how much tax do you have to pay ARCA? I assume that is their IRS? So the company employing you pays on your behalf? I am thinking about remotely working there but I guess if I don't' get residency there you would never declare it to their IRS.

Curious what tax rate you have to pay?

 

[Darksider415]

How does this work @Darksider415? When it is declared, how much tax do you have to pay ARCA? I assume that is their IRS? So the company employing you pays on your behalf? I am thinking about remotely working there but I guess if I don't' get residency there you would never declare it to their IRS.

Curious what tax rate you have to pay?

It's literally just like any other job en blanco where the taxes are taken out of the paycheck along with the obra social and retirement. The only difference is, after that stuff has been taken out at official rate, it's converted back at the same rate and sent to Uruguay instead of deposited in my local account.

The total, including obra social and retirement and taxes is somewhere around 29%. 23% is income tax, the remaining 6ish percent are obra social, retirement and the deductions for ley 19032

 

[earlyretirement]

So, my case is slightly unusual because I have a good-paying startup gig that pays me en blanco, depositing the dollars in an account across the river in Uruguay...

I only transfer enough into Argentina to cover expenses and I only put enough dollars in the local account to pay any USD expenses on my local credit cards + pay my rent. All of my actual savings either stay in Uruguay or get sent from Uruguay to one of my US accounts.

There is absoluely NO reason to keep big amounts of USD in your USD account. It is convenient to keep some but most expats don't want to deal with large amounts. Also, you have to remember that most expats aren't declaring all of their income either so they don't want to get on the radar or ARCA as they monitor all movements through it.

I did keep some larger balances in my USD account in Argentina when I lived there full time as I was always doing so many transactions and not always feasible to go to bank safety deposit box. And there were some stable years with less risk. But in Argentina you never know when you will have issues. I posted before about how HSBC shut my account down in the middle of COVID. I had over $20,000 USD in it. They wouldn't let me do anything at all with my accounts. They said I had to come in person but wasn't any way I was going to go to Argentina with the lock down. So I had to wait almost 1.5 years before I could go.

Then when I got there I spent 2 hours arguing with the bank manager to get my money back. I had old bank statements and they were like, "show us a recent statement proving the funds are still in it". LOL. Meanwhile that was impossible as they shut it off and didn't send any statements and online statements were deleted. I told them I would come back with a newscrew, my lawyer and accountant and they would be on the news and in the paper for refusing to give me my money. I am also a Premier client in the UK, USA. They finally gave me my money back after those threats.

Needless to say I don't keep large amounts of USD in Argentina.

 

[Uncle Wong]

There is absoluely NO reason to keep big amounts of USD in your USD account. It is convenient to keep some but most expats don't want to deal with large amounts. Also, you have to remember that most expats aren't declaring all of their income either so they don't want to get on the radar or ARCA as they monitor all movements through it.

I did keep some larger balances in my USD account in Argentina when I lived there full time as I was always doing so many transactions and not always feasible to go to bank safety deposit box. And there were some stable years with less risk. But in Argentina you never know when you will have issues. I posted before about how HSBC shut my account down in the middle of COVID. I had over $20,000 USD in it. They wouldn't let me do anything at all with my accounts. They said I had to come in person but wasn't any way I was going to go to Argentina with the lock down. So I had to wait almost 1.5 years before I could go.

Then when I got there I spent 2 hours arguing with the bank manager to get my money back. I had old bank statements and they were like, "show us a recent statement proving the funds are still in it". LOL. Meanwhile that was impossible as they shut it off and didn't send any statements and online statements were deleted. I told them I would come back with a newscrew, my lawyer and accountant and they would be on the news and in the paper for refusing to give me my money. I am also a Premier client in the UK, USA. They finally gave me my money back after those threats.

Needless to say I don't keep large amounts of USD in Argentina.

OMG! What a nightmare.

 

[Avocado]

It's literally just like any other job en blanco where the taxes are taken out of the paycheck along with the obra social and retirement. The only difference is, after that stuff has been taken out at official rate, it's converted back at the same rate and sent to Uruguay instead of deposited in my local account.

The total, including obra social and retirement and taxes is somewhere around 29%. 23% is income tax, the remaining 6ish percent are obra social, retirement and the deductions for ley 19032

Did you not say you were American? Why not just have funds wired to American bank? I am wondering. Is there any advantage to Uruguay instead of US? I thought US banks the safest?

 

[James Bond]

It's literally just like any other job en blanco where the taxes are taken out of the paycheck along with the obra social and retirement. The only difference is, after that stuff has been taken out at official rate, it's converted back at the same rate and sent to Uruguay instead of deposited in my local account.

The total, including obra social and retirement and taxes is somewhere around 29%. 23% is income tax, the remaining 6ish percent are obra social, retirement and the deductions for ley 19032

Did you have to negotiate this? Or do they do this for all their employees? Or only because you demanded it?

There is absoluely NO reason to keep big amounts of USD in your USD account. It is convenient to keep some but most expats don't want to deal with large amounts. Also, you have to remember that most expats aren't declaring all of their income either so they don't want to get on the radar or ARCA as they monitor all movements through it.

I did keep some larger balances in my USD account in Argentina when I lived there full time as I was always doing so many transactions and not always feasible to go to bank safety deposit box. And there were some stable years with less risk. But in Argentina you never know when you will have issues. I posted before about how HSBC shut my account down in the middle of COVID. I had over $20,000 USD in it. They wouldn't let me do anything at all with my accounts. They said I had to come in person but wasn't any way I was going to go to Argentina with the lock down. So I had to wait almost 1.5 years before I could go.

Then when I got there I spent 2 hours arguing with the bank manager to get my money back. I had old bank statements and they were like, "show us a recent statement proving the funds are still in it". LOL. Meanwhile that was impossible as they shut it off and didn't send any statements and online statements were deleted. I told them I would come back with a newscrew, my lawyer and accountant and they would be on the news and in the paper for refusing to give me my money. I am also a Premier client in the UK, USA. They finally gave me my money back after those threats.

Needless to say I don't keep large amounts of USD in Argentina.

Typical Argy bank shenanigans.

Be careful everyone. My novia's mother went to withdraw her $4000 dollars she had in her dollar account today. They told her they would only give her old bills. She demanded newer bills and they refused. They gave her all older bills. They are doing this to discourage people to withdraw funds. Caution.

 

[Nasdaq]

Did you have to negotiate this? Or do they do this for all their employees? Or only because you demanded it?


Typical Argy bank shenanigans.

Be careful everyone. My novia's mother went to withdraw her $4000 dollars she had in her dollar account today. They told her they would only give her old bills. She demanded newer bills and they refused. They gave her all older bills. They are doing this to discourage people to withdraw funds. Caution.

I doubt anyone could do anything as it is legal tender. Terrible that they would do this because they know that cuevas either won't take it or charge much higher rates. Not good if banks are stooping this low.

 

[Bingo]

I doubt anyone could do anything as it is legal tender. Terrible that they would do this because they know that cuevas either won't take it or charge much higher rates. Not good if banks are stooping this low.

This happened to a girl I went out on a date with last weekend. She told me she went to the bank to withdraw some cash. They asked her where the funds came from that she deposited into her own bank! She did some funds with the amnesty and filled out all the required forms. They told her to come back the next business day which was Monday. Then she got there and they gave her all old $100 bills. She asked for new ones because she wouldn't be able to exchange these. They didn't care. I told her I will change them when I go to the US.

Banks here sound desperate if they are doing this to everyone. @Darksider415 have you tried to withdraw USD in BA? Do they give you older bills too?