Argentina Turned $10,000 in Peso Savings Into $114. Steve Hanke Says the Fix is Incomplete

In Argentina, inflation has fallen sharply under Javier Milei. Yet a decade of destroyed savings and expensive long-term credit explains why Argentines continue to seek dollars.

Argentines borrow at 29.9% on a long-term mortgage. Ecuadorians, who use the US dollar, borrow at 7.5%. 

Steve Hanke, the economist who helped Ecuador make that switch in 2000, reviewed BeInCrypto Intelligence’s new LATAM report ‘The Exodus Economy’ and says Argentina should follow, before the next government undoes Milei’s progress.

How Inflation Destroyed Argentina’s Peso, While Brazil’s Purchasing Power Increased. Source: The Exodus Economy

An Argentine who kept the equivalent of $10,000 in peso cash from June 2016 to June 2026 would have ended with about $114 in US-dollar value.

That is one of the starkest findings in BeInCrypto Intelligence’s new report, The Exodus Economy. Nearly 99% of the money’s dollar value disappeared over ten years as inflation and currency depreciation compounded.

The damage extended beyond cash. A local Argentine term deposit reduced the loss, but still preserved only 44% of its starting purchasing power. By comparison, a Brazilian CDI-linked deposit gained 50% in real terms over the same period. A Mexican deposit gained 30%.

The gap explains why dollar demand in Argentina has become a financial habit rather than a short-term response to one crisis.

Why Locals are Sending Money Away from LATAM. Source: BeInCrypto

Milei Has Slowed Inflation Sharply

Argentina’s immediate position has improved. Consumer prices rose 1.9% in June, the lowest monthly rate in ten months. Annual inflation stood at 33.5%, while prices increased 16.8% during the first half of 2026, according to INDEC.

The parallel-market premium for dollars has also fallen to around 2%, after exceeding 150% in 2023. The International Monetary Fund said recent fiscal, monetary and foreign-exchange reforms had strengthened Argentina’s reserve buffers and improved its ability to absorb shocks.

Steve Hanke, professor of applied economics at Johns Hopkins University, says the progress remains vulnerable.

“While President Milei’s extensive, but not full, liberalization of the foreign exchange market has allowed the parallel premium to collapse and inflation to fall, inflation is still too high for durable stabilization,” Hanke told BeInCrypto.

Hanke advised Ecuador when it adopted the US dollar in 2000 and previously developed an orthodox currency-board proposal for Argentina.

Argentina’s Inflation Rate Over the Past Year. Source: TradingEconomics

Mortgage Rates Reveal the Remaining Risk

Hanke points to long-term borrowing costs as a measure of confidence in Argentina’s monetary system.

“The current average interest rate for peso-denominated 20–30-year mortgages in Argentina is 29.9%,” he said. “In Ecuador, a country that I assisted in dollarizing in 2000, it is only 7.5% for similar mortgages.”

Monthly inflation can fall quickly after a major policy change. A long-term lender must consider what inflation and the peso could look like under several future governments. Argentina’s high mortgage rate shows that this political and currency risk remains expensive.

Hanke argues that the current framework leaves room for a future administration to reverse Milei’s reforms.

“Milei will not be in power forever,” he said. “Full dollarization would lock in stability in a way that current arrangements cannot.”

Official dollarization would replace the peso with the US dollar and remove the central bank’s ability to issue its own currency. Hanke believes this would impose tighter fiscal discipline and reduce lending risk.

The policy also carries costs. Argentina would lose control of its monetary policy, while its central bank would have less capacity to support banks during a crisis. IMF research has long treated these as central trade-offs in any move to full dollarization.

Argentines are Already Dollarizing Privately

Many households and businesses are no longer waiting for the state. They use dollar accounts and stablecoins to receive salaries, protect balances and make cross-border payments.

BeInCrypto’s on-chain analysis found that more than 99% of tracked stablecoin withdrawal volume moved again within 30 days. The time needed for half of a withdrawal cohort to move onward was 10.9 days in March 2026.

How LATAM Residents are Switching to the Dollar. Source: The Exodus Economy

This suggests digital dollars increasingly function as working money. Contractors receive pay in stablecoins, while businesses use them to settle invoices and supplier costs.

“Unofficial dollarization allows Latin Americans to escape partly the poor monetary policies that many national central banks have,” Hanke said. “But it still misses some of the benefits that occur with full dollarization.”

A dollar balance can protect an individual from peso depreciation. It cannot lower mortgage rates across the economy or prevent a future government from changing monetary policy.

Argentina has made clear progress against inflation. The report’s ten-year results show why rebuilding trust will take longer. Savers who watched $10,000 become $114 have little reason to abandon the dollar after a few months of improving data.

Download ‘The Exodus Economy’ to explore the full purchasing-power analysis and Latin America’s shift into dollar accounts, offshore structures and stablecoin rails.