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

After five consecutive months with net sales, the BCRA closed December with net purchases through the foreign exchange market, for USD 606 million, a situation that allowed international reserves to increase by USD 758 million.

The world economy continues to go through a health and economic crisis in the face of 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 implemented regulatory modifications that affect the foreign exchange market in order to promote a more efficient allocation of foreign currency. In this context, the entities and their customers sold USD 264 million and USD 342 million, respectively, in the foreign exchange market, which were purchased by the BCRA. In addition, the Monetary Authority made sales directly to the National Treasury for USD 250 million.

The real sector was a net seller of foreign currency for USD 658 million.

Within this group, the main sector in terms of historical net sales, “Oilseeds and Cereals”, recorded net revenues of USD 1,725 million, with a reduction of 25% compared to those recorded in the same period of 2019. It should be remembered that the sector in the last two months of 2019 registered extraordinary income, basically due to the increase in income from advances and pre-financing from abroad, totaling USD 2,288 million for December 2019.

The income level of the “Oilseeds and Cereals” sector was above exports of goods in December 2020, which were affected by the union conflicts that prevented the normal operation of the ports. For this reason, the level of indebtedness for advances and pre-financing of exports in the sector showed an increase in the month analyzed that would be around USD 1,100 million.

The “Real Sector excluding Oilseeds and Cereals”, on the other hand, was a net buyer in the foreign exchange market, with a total of USD 1,067 million, which meant a decrease in its net purchases of USD 466 million compared to the immediately previous month, basically due to lower net payments for goods. The purchases were mainly intended to make payments for goods and services, and to pay off financial debt.

It should be noted that after the peak observed in payments for imports of goods in September, these decreased by USD 696 million, totaling USD 3,727 million for December (practically without year-on-year variation), in line with imports of goods in FOB terms (increase of 23% year-on-year).

“Individuals” bought USD 311 million on a net basis, basically for hoarding (USD 157 million in banknotes, with a decrease of 10% compared to the previous month), and for expenses made with cards for consumption with non-resident suppliers (about USD 125 million, with a drop of 68% compared to the same month of the previous year, within the framework of the continuity of the closure of borders 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 27 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 surplus of USD 406 million, mainly explained by net sales of “Goods”, partially offset by net purchases of “Primary income” and “Services”.

The financial account of the “Non-Financial Private Sector” had a deficit of USD 281 million, as a result of net cancellations of financial debt and purchases of banknotes by individuals, partly offset by net income from foreign direct investment.

The operations of the foreign exchange financial account of the “Financial Sector” resulted in a deficit of USD 1,422 million, explained by the increase in the liquid foreign assets of the entities that make up the General Exchange Position (PGC) by USD 1,297 million and by the cancellations of financial debt and credit lines for USD 127 million.

The operations of the foreign exchange financial account of the “General Government and BCRA” resulted in a surplus of USD 946 million, mainly explained by net income from financial debt.