Report on the Evolution of the Foreign Exchange Market and the Foreign Exchange Balance

Executive summary

In April, the BCRA bought USD 2,770 million in the foreign exchange market, while customers and entities sold USD 1,717 million and USD 989 million, respectively. On the other hand, the BCRA made net payments through the Local Currency Payment System (SML) for USD 63 million.

The “Non-Financial Private Sector” was a net seller of foreign currency in the foreign exchange market (USD 1,681 million). Within this group, the “Oilseeds and Cereals” sectors (net sales of USD 2,482 million) and the “Real Sector excluding Oilseeds and Cereals” (net sales of USD 2,451 million) were the main net suppliers of foreign currency.

On the other hand, “Individuals” made net purchases of foreign currency for USD 3,199 million, mainly explained by purchases of banknotes and currency transfers without specific purposes (USD 2,292 million and USD 583 million, respectively). In addition, the “Legal Entities” made net sales of banknotes and foreign currency without specific purposes for USD 356 million and USD 156 million, respectively. It should be noted that, of the net purchases of banknotes and foreign currency without specific purposes, it is estimated that about USD 1,200 million were deposited in local banks and USD 400 million increased the position of foreign assets, while about USD 600 million were delivered to the entities to cover the expenses made with “Services and other current” cards.

In the exchange balance of April, a surplus of USD 1,333 million was recorded in the current exchange account. This result was explained by the net income from the “Goods” (USD 2,946 million) and “Secondary income” (USD 10 million) accounts, partially offset by the net outflows from the “Primary income” (USD 949 million) and “Services” (USD 674 million) accounts. In turn, the foreign exchange financial account was in surplus of USD 1,048 million. This result was explained by the surpluses of the “Financial Sector” (USD 1,001 million) and the “National Government and BCRA” (USD 954 million, mainly explained by the income from new issues of the National Government in the local market for USD 1,325 million). These were partially offset by net outflows from the “Non-Financial Private Sector” (USD 479 million) and “Other Net Movements” (USD 428 million).

The BCRA’s international reserves increased by USD 2,464 million in April, ending the month at a level of USD 44,516 million. This result was explained by the purchases of foreign currency in the foreign exchange market by the BCRA (USD 2,770 million) and the income from new issues of the National Government in the local market (USD 1,325 million). These movements were partially offset by the net cancellation of principal and interest to international organizations (USD 1,051 million), interest from BOPREAL (USD 251 million), the fall in the foreign currency holdings of the entities in the BCRA (USD 205 million) and net payments made by the BCRA through the SML (USD 63 million).