The positive result of foreign exchange operations of authorized entities with their clients in 2003 (excluding operations of the BCRA and the National Government that are carried out directly through the Central Bank) almost tripled with respect to the surplus of 2002, reaching US$ 6,219 million. This balance was the largest net income recorded in the foreign exchange market in the last eleven years, and its absorption by purchases by the Central Bank basically explains the increase in international reserves in the year.
Higher net foreign exchange earnings from goods and lower net outflows from services and the formation of private foreign assets – effects attenuated by higher net payments of rents and debts – explain the annual increase in the foreign exchange market surplus due to operations with customers.
Practically the entire surplus of the Single and Free Exchange Market (92%) was absorbed by the net purchases of the Central Bank. These purchases were the main factor in monetary expansion and in the US$ 3,644 million increase in international reserves in 2003. This increase was only exceeded in 1993 and 1996 (US$ 4,480 million and US$ 3,782 million, respectively). However, in those two years, a strong share of net external financing to the public sector was recorded as a source of foreign exchange, contrary to what was recorded in 2003, when the surplus was contributed by the private sector.
The exchange balance disaggregated by sector shows that the private sector made a record net contribution of foreign currency of US$ 6,496 million, while the public sector demanded foreign currency for a net amount of US$ 2,852 million, resulting in the aforementioned increase in international reserves of US$ 3,644 million.
The net formation of foreign assets of the NFPS was much lower than that recorded in the previous year, showing a clear downward trend towards the end of the year, to the point that in December, the first monthly net income since February 2002 was observed, when it exceeded purchases of foreign currency sales made to customers for the formation of freely available foreign assets.
The operations of the National Government and the BCRA with international organizations were negative by US$ 2,604 million, explained by interest payments of US$ 1,565 million and net payments for capital of US$ 1,039 million.
