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 August.

Main aspects

August turned out to be a heterogeneous month for the sectoral behavior of the foreign exchange market. Until Friday 9, the sales by daily auctions for US$ 60 million of the National Treasury funded the net purchases of the entities authorized to operate in foreign exchange and their customers. After the Open, Simultaneous and Mandatory Primary (PASO) elections, private net demand more than doubled and the Central Bank intervened by selling foreign currency in the spot market for the first time since the launch of the exchange scheme in October 2018.

The behavior of private deposits in foreign currency during the month of August was also heterogeneous. The initial increase of about $300 million through Aug. 9 was reversed by the $5.9 billion drop for the rest of the month. This drop occurred both in transfers abroad (“swap operations”, which totaled US$ 3,400 million in the month), and in cash withdrawals.

Thus, in August, the clients of entities bought US$ 2,525 million in the foreign exchange market and the group of entities authorized to operate in foreign exchange acquired US$ 620 million. These operations were funded with net sales from the National Treasury for US$ 1,076 million and the BCRA for US$ 2,069 million.

Companies in the real sector were net sellers of foreign currency for US$ 477 million.

Within this group, the main sector with net supply in historical terms, “Oilseeds and cereals”, had net sales of US$ 2,185 million, registering an increase of 22% compared to the same month in 2018.

Companies in the “Real Non-Oilseeds and Cereals Sector” made net purchases of US$ 1,708 million, mainly for payments for imports of goods and services and the constitution of local and foreign deposits.

“Individuals”, which basically demand foreign currency for hoarding and trips abroad, bought US$ 1,873 million net (US$ 1,516 million for banknotes and US$ 356 million for the rest of their operations), an amount that showed a decrease of 9% compared to purchases of US$ 2,053 million in August 2018.

The number of individuals who bought banknotes through the exchange market in August totaled 1,300,000, decreasing by 16% compared to July. 97% of this amount bought less than $10,000 each, while 32,000 individuals bought more than $10,000 each.

“Institutional investors and others”, both residents and non-residents, made net purchases in the month for US$ 900 million, a result that evidenced a decrease of US$ 720 million compared to the same month of the previous year.

In addition to purchases in the spot market, entities authorized to operate in foreign exchange made net forward sales in foreign currency for US$ 317 million.

The National Treasury made payments of principal and interest on debt for US$ 5,374 million, highlighting the expenditures for the cancellation of a pass made with a set of entities for US$ 3,500 million and LETES for US$ 1,350 million, and for payments to International Organizations for US$ 155 million. On the other hand, it recorded debt income of US$ 170 million, of which US$ 95 million corresponded to LETES issuances and US$ 75 million to International Organizations.

As a result of the aforementioned movements, gross international reserves ended August at a stock of US$ 54,100 million.