Argentina is moving to expand corporate access to dollar-denominated bank credit as the government seeks to deepen financial intermediation and support economic activity. Economy Minister Luis Caputo said banks will be permitted to lend companies up to 15% of their dollar deposits, while authorities also move to relax foreign-currency lending regulations.

Government Targets Corporate Credit Constraints

The new framework is intended to increase the amount of financing available to Argentine businesses, particularly companies that have faced elevated borrowing costs in pesos. Caputo said the auto and construction industries, among others, had requested more flexible lending conditions because high peso interest rates have made domestic credit difficult for businesses.

Under the measure, banks will be able to use up to 15% of their dollar deposits for corporate lending. The policy is therefore designed to increase the productive use of foreign-currency deposits while maintaining a limit on the proportion of those funds that can be deployed as loans.

The initiative could be particularly relevant for businesses with revenues or costs linked to foreign currencies. Access to dollar financing can reduce reliance on expensive peso-denominated borrowing, although the ability of companies to service dollar debt will remain an important consideration as the country’s currency and economic conditions evolve.

Dollar Deposits Become More Important to the Reform Strategy

Argentina’s government is also seeking to bring more undeclared savings held in cash or overseas accounts into the formal financial system. According to the government, the new lending measure complements tax reforms designed to encourage Argentines to formalize dollar savings.

The strategy is based on a broader financial-cycle objective: increasing the amount of foreign currency held within banks could expand the pool of funds available for productive lending. Caputo said the authorities expect the additional dollar credit to help stimulate investment and job creation.

Argentina has historically had a large preference for holding savings outside the domestic banking system, reflecting long periods of inflation, currency instability and financial restrictions. Bringing more of those dollars into banks could therefore have implications beyond corporate lending by increasing the depth of the formal financial system.

Central Bank Relaxes Foreign-Currency Lending Rules

Argentina’s central bank also announced that it would relax regulations governing foreign-currency lending following the government’s policy changes. The regulatory adjustment is intended to facilitate the expansion of dollar-denominated credit while supporting the broader effort to reactivate economic activity.

The policy comes as the government continues to pursue reforms under President Javier Milei. The International Monetary Fund has credited the reforms with helping to curb inflation, while also emphasizing the need to improve access to credit for businesses and households.

The IMF’s focus on credit availability is significant because stabilization of inflation does not automatically translate into broader economic recovery. Businesses still require access to financing to invest, expand capacity and maintain employment, making the development of a functioning credit market an important next stage of Argentina’s economic adjustment.

Credit Expansion Carries Both Opportunities and Risks

The increased availability of dollar credit could support investment in sectors that generate foreign-currency revenues or benefit from Argentina’s longer-term export potential. At the same time, foreign-currency lending introduces additional risks for companies whose revenues are primarily denominated in pesos.

For banks, the policy also creates a need to balance increased lending opportunities with liquidity and currency risks. The 15% limit provides a regulatory boundary, but the quality of borrowers and the structure of the loans will remain important factors in determining whether greater dollar lending strengthens the financial system.

Looking ahead, investors will monitor the pace of dollar-deposit growth, corporate loan demand, the implementation of the new central-bank rules and evidence of increased business investment. If more foreign currency moves into the formal banking system and credit expands without creating significant balance-sheet pressures, the policy could support Argentina’s broader economic normalization. The effectiveness of the measure will ultimately depend on whether improved access to dollar financing translates into productive investment, stronger employment and more durable private-sector growth.