The government of Argentina has allowed companies that do not generate export revenues to take out loans in dollars.
The goal is to take advantage of funds in United States currency that have recently flowed into the banking system, mainly as a result of government measures encouraging Argentines to bring their stashed dollar savings into the formal economy.
To make that possible, President Javier Milei amended a regulation that had been in place since the 2001 crisis, which restricted access to dollar-denominated credit to companies able to demonstrate income in that currency.
The rule was intended to prevent borrowers from assuming foreign-currency liabilities without a natural hedge against exchange-rate risk.
It was created to avoid another collapse of the Argentine banking system, like the one that took place 25 years ago, sparking one of the worst economic and political crises in the country’s history.
