Informe de Evolución del Mercado de Cambios y Balance Cambiario

This report analyzes the evolution of purchases and sales of foreign currency in the foreign exchange market, corresponding to the third quarter of 2014.

Main aspects

The operations arranged by the entities authorized to operate in foreign exchange with their customers in the Single and Free Exchange Market (MULC), showed a deficit of US$ 126 million in the third quarter of 2014, marking a strong recovery with respect to the deficit of about US$ 2,000 million recorded in the third quarter of 2013.

The improvement in the result of about US$ 1,900 million compared to the same quarter of 2013 was mainly explained by two factors.

First, net merchandise revenues of about US$ 2,000 million were recorded in the period, reversing the deficit observed in this account in the same quarter of the previous year by around US$ 2,300 million.

Second, net expenditures for services had a year-on-year drop of about US$ 850 million, mainly due to the 30% reduction in net demand registered for tourism and travel and tickets, which was around US$ 1,370 million in the quarter. These year-on-year improvements were partially offset by the net purchase of banknotes for treasury, which was around US$ 800 million.

The Central Bank made net purchases in the foreign exchange market for US$ 413 million, which net of payments for foreign trade operations channeled by the Local Currency Payment System in force with Brazil (SML) and by ALADI for a total of US$ 238 million, meant a total of US$ 175 million. These purchases were basically due to the sales of entities holding foreign currency in the BCRA, with no net effect on total international reserves, for about US$ 500 million, mainly from the adaptation to the rules on the Net Global Position in foreign currency, which more than offset the sales made by the BCRA to cover the deficit of the entities with customers in the foreign exchange market.

On the side of uses with direct impact on international reserves, the cancellations of capital services and interest on the public sector’s foreign currency debt for US$ 1,025 million stood out, mainly for obligations with international organizations and with holders of public securities. Of note within this total, the payment of the equivalent of US$ 642 million corresponding to the initial cancellation as capital owed to the creditor countries that make up the Paris Club, by virtue of the solution agreed on 29.05.14.

The maturities of public securities services include the payment of the Par bond in foreign currency for US$ 177 million, originated in the debt swaps of the 2005-2010 period. This total includes deposits of the Argentine Republic in accounts of the trustee Nación Fideicomisos, to be applied to the payment of interest services corresponding to the Par in U.S. dollars and euros with foreign legislation for US$ 161 million, which remained deposited with the Central Bank of the Argentine Republic at the end of the quarter.

Current account operations of the foreign exchange balance registered a deficit of US$ 455 million in the quarter, showing an improvement of about US$ 3,200 million compared to the result of the same period of 2013.

The oilseeds, oils and cereals sector settled export collections for US$ 6,635 million, a level 13% below what was achieved in the same period of 2013. For its part, the rest of the sectors as a whole registered collections for exports of goods for US$ 10,918 million, showing a decrease of 12% in year-on-year terms.

The year-on-year decrease in net import payments of the main import sectors was given by the automotive, chemical and textile industries, and the machinery and equipment and other manufacturing sectors, totaling between them lower net expenditures of about US$ 3,000 million. There were also lower payments of imports by companies linked to the energy sector by about US$ 300 million, especially for the concepts of advance and demand payments, since debt payments had a year-on-year increase of 13%.

The capital and financial account of the foreign exchange balance recorded a deficit of US$ 527 million, mainly as a result of net expenditures of the non-financial private sector (NFPS) of US$ 1,286 million and of the public sector and BCRA of US$ 227 million, partially offset by the net income of financial sector entities of US$ 133 million.

The BCRA’s gross international reserves decreased in the quarter by US$ 1,413 million, reaching a stock of US$ 27,866 million at the end of September 2014.