The surge in Argentine bank deposits in Uruguay made front page news last week and should come as a surprise to no one who has followed the impact of Argentine currency controls on everything from new construction to existing property sales to outbound tourism.
The surprising part of the story is exactly where those funds are being deposited in Uruguay. According to a follow-up story today in El Observador, “Colonia Is Becoming The Safe Deposit Box For Argentine Savings,” a headline that bodes well for Colonia hotels, restaurants, real estate developers, ferry operators and, of course, banks.
Colonia now has more bank branch locations (27) than Punta del Este (23), and 41% of all deposits in Colonia banks belong to non-residents. In addition, while Argentine bank deposits in Uruguay have grown 177% over the eight-year period from 2004 to 2012, they have jumped an astounding 509% in Colonia.
Colonia’s proximity to Buenos Aires, a surfeit of long holiday weekends across the River Plate and the growth of service infrastructure are converting Uruguay’s oldest town in to a year-round tourist destination for Argentines and other international travelers. (Full Story in Spanish)
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