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 December.

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) resulted in a surplus of US$ 1,034 million. This result was the second highest in 2016 and showed a reversal of US$ 2,760 million compared to the net outflow of US$ 1,726 million observed in the same month of the previous year.

The impact of the Tax Sincerity Regime was particularly relevant in the month, which generated revenues of US$ 4,092 million for the payment of tax debts corresponding to the provisions of Law No. 27,260.

The surplus of customers in the MULC was absorbed by the Central Bank (BCRA), which made net purchases of foreign currency for US$ 706 million, and by the entities for about US$ 330 million. In addition, the Central Bank made net purchases directly from the National Treasury for US$ 400 million, with no net effect on international reserves, since the funds were deposited in the BCRA.

The volume traded in the MULC totaled US$ 53,352 million (US$ 2,668 million on a daily average), a level that represented a new maximum in the history of the MULC, registering an increase of 59% in year-on-year terms.

Current account operations in the foreign exchange balance were in deficit by US$ 1,904 million, doubling the net outflow compared to the same month of the previous year (US$ 954 million), as a result of higher net outflows from the “Primary income” and “Services” accounts, and lower net income from transfers of “Goods”.

Operations for transfers of goods from the foreign exchange balance registered a net income of US$ 443 million, as a result of export collections of US$ 4,652 million (year-on-year increase of 4%, with a year-on-year fall in revenues from oilseeds and cereals) and import payments of US$ 4,209 million (year-on-year increase of 10%, driven by the increase in payments of the automotive industry).

The NFPS capital and financial account showed net income of US$ 1,943 million, basically explained by net income from the net sale of freely available foreign assets for US$ 2,015 million, which can be broken down into net sales of foreign currency for US$ 3,958 million (which include the repatriation of funds from abroad by residents for the cancellation of tax debts) and net purchases of banknotes for US$ 1,943 million.

The authorized entities increased their current accounts at the BCRA by about US$ 1,900 million, basically as a result of the increase in private deposits in foreign currency by about US$ 1,700 million, bringing the stock to a new high since mid-2002, US$ 22,400 million, and the fall in the general exchange position due to the reduction of part of the banknotes collected within the framework of the Fiscal Sincerity Regime. These movements were partially offset by the fall in public sector deposits of about US$ 1,000 million.

The BCRA’s gross international reserves increased by US$ 1,394 million, ending the month with a stock of US$ 38,772 million.

In 2016, within the framework of the regulatory modifications aimed at greater freedom in the movement of capital, the result of operations between entities authorized to operate in foreign exchange and their clients was a surplus of US$ 1,907 million.

During the year, the BCRA made purchases in the foreign exchange market for US$ 3,536 million, acquiring both the surplus of customers and the sales of holdings of the entities. In addition, the Central Bank made net purchases directly from the National Treasury for some US$ 10,900 million (totaling US$ 14,436 million, which were added to the liquid assets in foreign currency held by the BCRA), and made payments for foreign trade operations channeled through the Local Currency Payment System (SML) in force with Brazil and by ALADI for US$ 1,018 million.

Also highlighted as sources of increase in international reserves were income from debt issuances of the national government, net of payments of principal and interest maturities, which totaled US$ 12,683 million in the year.

Thus, the BCRA’s gross international reserves increased by US$ 13,208 million in 2016.