Argentine Banks Pay Highest Rate in 3 Years to Keep USD Savings

(Bloomberg) -- Argentine banks are willing to pay top dollar to hold onto their customers’ greenbacks.

As the country’s financial crisis deepens, savers are withdrawing their dollar deposits from their accounts. But the banks are striving to retain them by paying the highest returns in more than 3 years, while the Central Bank adopts measures to provide liquidity and guarantee supplies of the U.S. currency.

Since Friday, banks have increased the returns they offer on time deposits in dollars. The rate jumped to almost 4%, the highest level in 43 months. The last time dollar rates were so high was when President Mauricio Macri lifted capital controls, a measure he reversed on Sunday.

Argentine savers have been withdrawing greenbacks from banks since Macri’s poor showing in a primary election sent the peso tumbling by over 20%. Argentina’s banking system allows depositors to save in either pesos or dollars.

Savers pulled almost $4.7 billion from dollar-denominated accounts since the day after the vote, according to the official data through Aug. 29. That’s equivalent to 14.5% of dollar deposits in the financial system, and led the government to take drastic measures including the implementation of currency controls.

To contact the reporter on this story: Ignacio Olivera Doll in Buenos Aires at ioliveradoll@bloomberg.net

To contact the editors responsible for this story: Andrea Jaramillo at ajaramillo1@bloomberg.net, Bruce Douglas

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