Argentina's Ministry of Finance announced a partial easing of dollar lending restrictions for companies, while retaining the safeguards governing foreign currency credit. The measure applies only to legal entities and excludes individuals, with the government seeking to expand financing for investment, particularly in employment-intensive sectors such as construction and automotive manufacturing. The framework will continue to require conversion of foreign currency loan proceeds and maintain restrictions on banks’ foreign currency exposure to the public sector. Banks may purchase national Treasury securities worth no more than one-third of their foreign currency loans. Dollar deposits carry a 25% reserve requirement, while banks have historically maintained about 10 percentage points of additional liquidity. The ministry estimated that banks could provide a further USD 5.8 billion of dollar loans if they used their full lending capacity of 75% of deposits. Private-sector dollar deposits have risen from USD 14.1 billion in December 2023 to USD 40.3 billion, while dollar loans have increased from USD 3.7 billion to USD 24.6 billion. The Central Bank of Argentina will adjust the prudential framework for foreign currency financing to implement the easing.

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