Money laundering is approaching a decisive date: what opportunities are there to invest dollars?

In the last seven wheels, The level of cash deposits in dollars in the financial system grew to levels of 340 million dollars per day (a lot). Those bills that until two months ago were in the shadows in safe deposit boxes or “under the mattress” today have turned to the financial system. The obstacles to officially buying dollars in recent years and an economy with a high level of informality have generated a captive demand for this process that we are seeing.

Let us remember that one of the main attractions of this money laundering is its low cost or penalty. The $100,000 deductible for whatever is cash seems like a great excuse to change a basic situation: Cash dollars, following the inflationary process in the United States in recent years, have lost purchasing power.

For Argentines, buying dollars to hoard has always been seen as a refuge of value in the face of the constant depreciation of our currency. In this case, Those who launder up to US$100,000 in cash do not pay any penalties.

Money laundering: what can be invested in dollars?

Another distinctive aspect is the The versatility offered by the wide variety of destinations that can be given to the laundered money: sovereign, provincial, municipal bonds, negotiable obligations, shares, Bopreales, deferred payment checks, promissory notes, mutual funds (special classes), registrable assets, real estate projects, etc. Clearly the intention is that the money that until now had been hidden out of fear would help to stimulate the economy.

In this sense, the week that is ending added a more than interesting novelty that we cannot ignore. The US Federal Reserve announced a 0.5% cut in its interest rates. That is to say, finally, from a process of rate hikes to attack American inflation that began in 2022, this week the Fed indicated that it was time to turn around.

A lower level of the American rate, if it were not in a scenario of serious recession in the world, of course, should boost investors’ risk appetite. This element is something that usually favors emerging countries (and why not “frontier” countries like us too).

In this context, The potential dollar return of many of these options (currently eligible) is very attractive. And while the rally of the last few days has caused Argentine asset prices to rise considerably, The valuations are far from countries with comparable fragility such as Egypt.

The combination of these factors (low cost, flexibility of options and now also the drop in rates in the United States) seems to be an invitation to take advantage of an opportunity to circulate money that until now had been “trapped.” We all know that Argentina is not a “risk-free” country, but if the expectation is that the macro variables will progressively accompany, that the actors will become more and more confident, The country could be one of the most attractive cases within the emerging world in 2025.

Without going any further, clients who entered early into this money laundering and invested in assets such as Bopreales 2026, Global bonds 2038 or 2035, bank or energy company shares, are already offering returns that in some cases exceed 15% or 20%.

“The story arrives there fine”… As the Italians say, the count comes at the end, and until the money laundering process and its stages are completed, we will not know what the result will be. However, with the information we have so far and the movements we are seeing, it seems to be healthy, both for the citizens and for the economy, which will have more resources.

Director of Wealth Management at PPI