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

The world continues to navigate the COVID-19 pandemic, with impacts on both the level of global and local activity, trade flows and capital movements. In recent months, the BCRA has been implementing regulatory modifications that affect the foreign exchange market (Communication “A” 7030 and its amendments), while in August the process of restructuring public debt with foreign legislation was successfully completed. In this context, the clients of the entities bought USD 1,333 million in the foreign exchange market, which were sold by the BCRA and the entities, for USD 1,278 million and USD 55 million, respectively. Additionally, the monetary authority made sales directly to the National Treasury for USD 563 million.  The real sector was a net buyer of foreign currency for USD 103 million.

Within this group, the main sector in terms of historical net sales, “Oilseeds and Cereals”, recorded net revenues of USD 1,503 million, with a reduction of 31% compared to those recorded in the same period of 2019. This level of income was below the estimates of net exports of goods, which would imply that the sector would have resumed debt cancellation due to advances and pre-financing of exports observed in the first five months of the year. The sector’s level of indebtedness for export financing is at an all-time low.

The “Real Sector excluding Oilseeds and Cereals”, on the other hand, was a net buyer in the market with a total of USD 1,606 million, which meant an increase in its net purchases of approximately USD 240 million compared to the immediately previous month. These purchases were mainly intended to make net payments for goods and services, and to pay off financial debt.

“Individuals” bought USD 920 million net, basically for treasury tickets (USD 750 million), and for expenses made with cards for consumption abroad (about USD 137 million, with a 64% year-on-year drop, in the context of border closures due to the COVID-19 pandemic).

The “Institutional investors and others” sector, both resident and non-resident, made net purchases in the month for USD 173 million.

The foreign exchange current account, which includes the net result of foreign exchange operations recorded as net exports of goods and services, and primary and secondary income, registered a deficit of USD 462 million, explained by net purchases by “Primary income”, “Services” and “Secondary income”, which were partially offset by net income from “Goods”.

The financial account of the “Non-Financial Private Sector” had a deficit of USD 1,150 million, as a result of the net formation of foreign assets and the net cancellations of financial debt.

The operations of the foreign exchange financial account of the “Financial Sector” resulted in a surplus of USD 364 million, explained by the decrease in the liquid foreign assets of the entities that make up the General Exchange Position (PGC) by USD 445 million, partially offset by cancellations of financial debt and credit lines for USD 81 million.

The operations of the foreign exchange financial account of the “General Government and BCRA” resulted in a surplus of USD 24 million, mainly explained by net debt inflows from international organizations.

During August, the BCRA’s international reserves decreased by USD 544 million, ending the month at a level of USD 42,842 million.