Chronic inflation and the drive to dollarize savings

Argentina has run high and often triple-digit inflation for most of the period since the early 1950s, with the 1991-2001 convertibility regime the only sustained exception - and one that ended in default. Central Bank President Miguel Ángel Pesce, addressing a 2023 monetary conference, argued that this history has pushed Argentine savings structurally out of the peso: since 2006 the country has imported on the order of $171 billion in US banknotes, and Argentine residents' holdings of foreign assets abroad are estimated near $380 billion, a scale of dollarization that dwarfs the country's own domestic capital market, where private-sector financing amounts to only about 6% of GDP. To limit further flight into dollars, Pesce said the central bank had sterilized roughly $60 billion of peso savings through its own instruments, at the cost of large stocks of short-term liabilities. He framed persistent energy and external-sector constraints, rather than purely fiscal or monetary slippage, as the structural limits still driving Argentina's inflation and peso cycles, including the 2018 currency crisis and the acceleration that followed - a pattern visible across decades of the country's price and exchange-rate charts.