According to Reuters, depositors withdrew a total of about $100 million per day over the last month in a safe-haven bid fueled by uncertainty over policies that might be adopted as pressure grows to keep U.S. currency in the country.
The flight into dollars is motivated by fear that the government may further toughen its clamp down on access to the U.S. dollar as high inflation and lack of faith in government policy erode the Argentinian peso. The Argentine central bank, under the supervision of Mercedes Marcó del Pont, is pumping out pesos at a rate that may ultimately result in the destruction of the currency.
So is Argentine President Cristina Kirchner ordering del Pont to stop the mad money printing?
No. The flight out of the peso, brought on by this money printing, has resulted in Kirchner attempting to force Argentinians to keep their money in the rapidly depreciating pesos.
U.S. dollar deposits of Argentine banks fell 11.2 percent in the preceding three weeks to $11.5 billion, according to central bank data released on Friday. The run on the greenback has waxed and waned since November, after President Cristina Fernandez won a second term on promises of deepening the state's role in the economy.(htCharlesWilson)
From May 11 until Friday, data compiled by Reuters from private banks showed $1.9 billion in U.S. currency had been withdrawn, or about 15 percent of all greenbacks deposited in the country.
Feisty populist leader Fernandez was re-elected in October vowing to "deepen the model" of the interventionist policies associated with her predecessor, Nestor Kirchner, who is also her late husband.
Since then she has limited imports, imposed capital controls and seized a majority stake in top energy company YPF...
The near-impossibility of buying dollars at the official rate is driving some savers and investors to pay a hefty premium in the black market.
Many are taking what dollars they can get their hands on and stashing them under the mattress or in safety deposit boxes, fearing moves by the government to forcibly "de-dollarize" the economy. Officials have strongly denied any such plan.
The president's battle to slow capital flight and fatten the central bank reserves needed to pay the public debt has prompted even tighter controls in recent weeks, making it almost impossible to buy dollars at the official rate. The effects have been felt throughout the South American country's economy.
For example. Argentines, who normally pay for new homes with stacks of dollar bills, have been struggling to get their hands on U.S. currency since Fernandez started imposing stringent controls on dollar buying late last year.
She wants Argentines to end their love affair with the greenback and start saving in pesos despite inflation clocked by private economists at about 25 percent per year..