Argentine Banks at Risk as Cash Exodus Quickens
About 1.2 billion pesos ($324 million) left Argentine banks due to the lawsuits in July, the sources said on condition of anonymity, compared to 1.008 billion pesos in June.
Such outflows averaged about 800 million pesos between February and May. Frozen fixed-rate deposits in Argentine banks totaled about 29 billion pesos at the end of June, according to official data.
The sources drew their information from testimony given by Central Bank President Aldo Pignanelli to the Senate on Wednesday. The Central Bank could not be reached for comment.
Argentina froze most bank deposits in January to stop a run on banks amid a chaotic recession now in its fifth year. But thousands of individual court rulings against the freeze have allowed many depositors to recover their cash anyway.
The International Monetary Fund has urged Argentina to find a way to stop the bleeding of cash due to the lawsuits, but successive laws and presidential decrees have been quickly declared unconstitutional by judges.
Despite the deposit freeze, Argentine banks have teetered on the verge of total collapse for months due to January's debt default, the peso's 70 percent drop against the dollar this year and a complete public lack of confidence in the system.
The government in January also ordered bank accounts denominated in U.S. dollars to be converted into pesos, an action described by many analysts as a gross violation of property rights that may take years to repair.
An Economy Ministry source said the government was studying a new plan that would encourage depositors to put dollars back in Argentine banks by guaranteeing them with a trust fund set up abroad. Those dollar deposits would then be used to help finance Argentine exports, AFP reported.
But most Argentines say in polls they never plan on depositing money in local banks again.