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 June.

Main aspects

Inflation in advanced countries has been persistent, and central banks in those countries have continued to raise interest rates and tighten liquidity. This, added to the financial turbulence that began during March, increased recession risks, especially in advanced economies, which had a downward impact on commodity prices, which, in general, registered levels prior to the war between Russia and Ukraine. Added to this international panorama is the drought that has been experienced in the national territory, which has generated a great decrease in the quantity and quality of the exportable product that was expected for the year.

In this context, during June, the customers of the entities bought USD 1,438 million in the foreign exchange market, while the entities made purchases for USD 177 million. For its part, the BCRA sold USD 1,490 million in the market and made net payments through the Local Currency Payment System for USD 126 million.

The “Non-Financial Private Sector” was a net buyer of foreign currency for USD 1,365 million in the foreign exchange market. Within that group, the main sector in terms of net sales, “Oilseeds and cereals”, recorded net revenues of USD 791 million, 79% less than in the same month of 2022. The lower net income from goods in the sector during June responded, firstly, to the effects of the drought on exportable output and, secondly, to the partial cancellation of the commercial debt that the sector had the previous month within the framework of the third edition of the “Export Increase Program”.

The “Real Sector excluding Oilseeds and Cereals” was a net buyer of foreign currency for a total of USD 1,629 million, exhibiting a year-on-year reduction of 38% in its purchases, mainly explained by the lower deficit of the Goods and Services accounts and the income from foreign direct investment.

“Individuals” bought USD 537 million net, mainly for travel expenses and other consumption made with cards with non-resident suppliers (with a net result of USD 334 million) and for hoarding (with a net of USD 158 million for ticket purchases).

The “Institutional and other investors” sector, both resident and non-resident, made net sales in the month of USD 10 million, mainly in net interest income.

The foreign exchange current account registered a deficit of USD 1,712 million. This result was explained by the deficits in the Goods, Primary Income, Services, and Secondary Income accounts, for USD 921 million, USD 426 million, USD 363 million, USD 1 million, respectively.

The financial account of the “Non-Financial Private Sector” had a deficit of USD 155 million in June. This result was explained by the records for the cancellations of balances in foreign currency with local entities for the use of cards with non-resident suppliers for USD 287 million (which do not entail a net demand for foreign currency in the financial account)1, the records of exchange operations for net transfers abroad for USD 130 million (largely explained by the recording of the counterparty of the income from travel and tickets without obligation to settle in the foreign exchange market, for more information see Section III.1.2.), net outflows from local financial loans of USD 83 million, net payments of loans from international organizations of USD 56 million, partially offset by income from foreign direct investment of USD 223 million and income from other foreign financial debts and debt securities of USD 182 million, while the formation of foreign assets showed a neutral balance.

The operations of the foreign exchange financial account of the “Financial Sector” resulted in a deficit of USD 51 million. This result was explained by the net sale of securities for USD 63 million and the cancellation of financial loans and credit lines for USD 38 million, partially offset by the decrease of USD 50 million in the liquid foreign assets of the entities that make up the General Exchange Position (PGC).2

The operations of the foreign exchange financial account of the General Government and the BCRA resulted in a deficit of USD 2,482 million, mainly explained by capital payments to the International Monetary Fund of USD 2,683 million (SDR 2,014 million).

In June, the BCRA’s international reserves decreased by USD 5,075 million, ending the month at a level of USD 27,926 million. This decrease was mainly explained by capital payments to the International Monetary Fund of about USD 2,683 million (SDR 2,014 million), by the decrease in the foreign currency holdings of the entities by USD 717 million, by the fall in the price in US dollars of the assets that make up the reserves by USD 445 million, by the BCRA’s net sales in the foreign exchange market and by the BCRA’s net payments settled through the Local Currency Payment System.