Milei urges Argentines to bank 'mattress dollars' – DW – 06/15/2025

DW15-06-2025

Argentina's libertarian President Javier Milei has his sights set on an estimated $271 billion in cash stashed away by his fellow citizens to survive economic hardships.
Thanks to sweeping spending cuts, Argentine President Javier Milei has managed to bring inflation in his country down from a monthly 25% in December 2023 to below 3% now, according to official data published by the country's INDEC statistics agency.
And yet, the cost of living in Argentina is still rising, forcing the libertarian leader to make another controversial proposal to the public.
He's called on his fellow citizens to spend their cash dollars squirreled away in mattresses and foreign bank accounts, long held by Argentines as a hedge against decades of economic turmoil.
Last week (June 5), Milei's government sent a bill called Fiscal Presumption of Innocence to Congress, declaring that the law ensures that there will be no more persecution of those Argentines holding undeclared dollars.
The measure widens a tax amnesty scheme rolled out last year which already lured tens of billions of dollars back into circulation.
Milei's sweeping austerity measures have reined in inflation, but left many Argentines facing economic hardships Image: DW
During Milei's 2023 presidential election campaign, his supporters marched through the streets of Buenos Aires waving oversized dollar bills featuring their candidate's face. Milei himself called the Argentine peso "worth as much as shit," initially pledging to replace it with the US dollar as legal tender once he's elected.
Today, Milei's dollarization drive is back on the agenda, but in a different form. This time, it's not about switching the national currency, but about integrating the US dollars Argentines have been stockpiling at home into the formal economy.
Dollars 'under the mattress'
The INDEC agency has estimated that Argentinians have about $271 billion (€234 billion) hidden away, money that is colloquially referred to as "dolares del colchon," or mattress dollars. The exact amount is unknown, because the money is essentially undeclared.
People began stockpiling these dollars during Argentina's prolonged periods of hyperinflation, which gripped the country until the end of 2023. Having access to US dollars in cash — or being able to receive and withdraw dollar funds — allowed people to sidestep skyrocketing peso prices by taking advantage of favorable exchange rates.
In Argentina, dollar cash reserves became a kind of financial life insurance.
Eugenio Mari, chief economist at the Buenos Aires-based libertarian think tank Fundacion Libertad y Progreso, finds this behavior perfectly rational.
Speaking to DW, he said that for decades Argentines have tried to "protect themselves from inflation and from government overreach," meaning many used part of their income to buy dollars and kept them out of circulation.
But saving in dollars also meant making consumption sacrifices and spending less overall.
Cash dollars for economic recovery
Now, President Milei wants to change that engrained behavior by convincing Argentines to bring the hidden dollars back into the monetary system for the benefit of the broader economy.
The government argues that inflation has been tamed — at least for the time being — creating the right moment to release the hoarded cash.
It's yet unclear how many Argentines are considering bringing their dollars back in circulation Image: Natacha Pisarenko/AP Photo/picture alliance
But trust in a currency can be destroyed quickly, while rebuilding it takes much longer. So it's still unclear whether Argentines are willing to monetize their "mattress dollars" in sizeable amounts.
In his effort, Milei is counting on deregulation and the removal of tax burdens to encourage them. Some even say the president is banking his political future on the scheme, which may come to be seen as a test of people's trust in his economic policy.
So far, the plan is progressing slowly, daily newspaper Clarin wrote last week.
'Fiscal innocence' bill
Technically, Argentinians are required to report any foreign currency holdings. But the law has never been fully enforced.
Milei's bill guaranteeing fiscal innocence to offenders was a clever move, says economist Mari.
"The removal of reporting requirements to the tax authority makes transactions easier and reduces the risk of citizens being pursued by the state, especially by tax authorities," said Mari.
Since Javier Milei took office in December 2023, many economic indicators have improved. Inflation has dropped significantly, poverty is declining, the government has posted budget surpluses, and the economy is growing.
Argentina sees protests swell ahead of major strike
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According to recent World Bank forecasts, Argentina's economy is expected to grow by 5.5% this year, with another 4.5% projected for next year.
However, prices for food and essential goods have soared, due largely to the rollback of state subsidies and the strengthening of the Argentine peso.
Dollarization through the backdoor?
Thousands of Argentines, meanwhile, are crossing borders into Chile, Paraguay, or Brazil to shop more cheaply, as the stronger peso is giving them a more favorable exchange rate.
Hernan Letcher, director of the Centro de Economia Politica Argentina (CEPA) in Buenos Aires, believes Milei's aim with his dollar monetization plan is to "inject more dollars into the government's currency exchange system," which for him is "essentially a foreign exchange policy measure."
As Argentines go shopping abroad, the country's central bank has reported growing capital outflows amid a stronger peso Image: Carol Smiljan/NurPhoto/picture alliance
Nau Bernues, a financial expert and the CEO of Quaestus Asteriscos — a firm specializing in the financial system and investments — believes the government wants to "go even further." The plan is to make the dollar a "more transactional currency" that would allow people to "buy not only an apartment or a car, but also an appliance or even a cookie at a kiosk."
"It's doing everything possible to ensure that there are more and more dollars. If that happens with constant pesos or no issuance, the exchange rate should appreciate," Bernues told the news agency Noticias Argentinas last week.
He noted that Milei's economic team was "constantly proclaiming" that the dollar could fall from currently about 1,180 pesos per greenback to 1,000 pesos.
But he personally is skeptical about Milei's "ambitious" plan, arguing that the dollars under the mattress are people's "insurance, perhaps their life savings," which they won't touch for anything, "except if they make it much easier to purchase land, real estate and assets that the average Argentine assigns a certain amount of protection."
This article was originally written in German.

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Trump posts about Iran 'regime change' after US strikes – DW – 06/23/2025

39 minutes ago

Trump posts about Iran 'regime change' after US strikes – DW – 06/23/2025

Iran's envoy to the UN said the US "destroyed diplomacy" by attacking Iranian nuclear sites. US President Donald Trump said he was open to a regime change in Iran. DW has the latest. US President Donald Trump posted to Truth Social that it was "not politically correct to use the term, 'Regime Change,' but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn't there be a Regime change???" "MIGA!!!" Trump's post was in contrast to what other officials in his administration have said about the strikes, with Defense Secretary Pete Hegseth having said the operation "was not, has not not been about regime change." The US struck Iranian nuclear facilities in Iran, including the key Fordo site, in a tightly choreographed operation dubbed "Midnight Hammer." US Defense Secretary Pete Hegseth said in comments Sunday that the US did not want a regime change in Tehran. US Vice President JD Vance also said the US was not at war with Iran but at "war with Iran's nuclear program." Tehran said the attack would have "everlasting consequences" and said it reserved "all options" to defend itself. Meanwhile, later in the day, Iran's envoy to the UN told an emergency meeting of the UN Security Council that it called after the US strikes that "Iran had repeatedly warned the warmongering US regime to refrain from stumbling into this quagmire." The big question now is how Iran will respond. We're following the news in the aftermath of US strikes on Iranian nuclear facilities that President Donald Trump said were a "spectacular military success." The Trump administration sent a series of conflicting messages to Iran following the strikes, with US officials indicating a willingness to resume negotiations with Iran. Trump later said he was open to the possibility of regime change in Iran. We'll bring you the latest news and analyses here.

Iran says deciding on 'timing' of response to US strikes – DW – 06/23/2025

an hour ago

Iran says deciding on 'timing' of response to US strikes – DW – 06/23/2025

Iran says US must 'receive a response' to strikes – DW – 06/22/2025

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Iran says US must 'receive a response' to strikes – DW – 06/22/2025

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Iranian Foreign Minister Abbas Araghchi said that by bombing nuclear program sites in Iran, the US had "blown up diplomacy." (See entry below) To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video America's top military officer, Chairman of the US Joint Chiefs of Staff General Dan Caine, told reporters on Sunday that overnight US strikes on Iranian nuclear facilities had included 14 massive ordnance penetrator or "bunker-buster" bombs, more than two dozen Tomahawk missiles and over 125 military aircraft. Caine called "Operation Midnight Hammer" the largest B-2 operational strike in US history, explaining that seven B-2 stealth bombers had flown 18 hours from the US mainland to Iran and refueled mid-air several times along the way to carry out the mission. Despite claims from President Trump and Secretary of Defense Hegseth that Iran's nuclear program was "obliterated", Caine said a battle damage assessment was still ongoing. 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US Defense Secretary Pete Hegseth on Sunday called military strikes against Iranian nuclear facilities "an incredible and overwhelming success" that had "obliterated Iran's nuclear ambitions." Hegseth said neither Iranian troops nor civilians had been targeted in the US operation. Just hours after the airstrikes on Iran, Hegseth echoed President Trump, claiming the US "seeks peace." He went on to say, "We will act swiftly and decisively when our people, our partners or our interests are threatened." Hegseth praised Trump for the operation, which he said had been months in the making: "The operation President Trump planned was bold and it was brilliant, showing the world that American deterrence is back. When this president speaks, the world should listen." Iranian media have reported "massive" blasts in the southern city of Bushehr, home to Iran's only nuclear reactor. Iranian authorities have not yet reported any problem at the plant, which is operated with Russian assistance. The cause of the blasts was not immediately clear. China's Foreign Ministry has criticized the US attacks on Iran, saying they "escalate tensions in the Middle East" and go against the UN Charter. Among other things, it said it condemned the targeting of nuclear facilities supervised by the International Atomic Energy Agency. "China calls on all parties to the conflict, especially Israel, to cease fire as soon as possible," the ministry said in a statement. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video