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 November.

Main aspects

The armed conflict between Russia and Ukraine caused great uncertainty and imbalances at the global level. Disruptions in input supply chains had a strong impact on international prices, mainly in energy products and food. As a result, there was an increase in global inflation and, consequently, an increase in reference interest rates in the world’s main economies.

In this context, the BCRA continued to improve foreign exchange regulation in order to promote a more efficient allocation of foreign currency. In particular, in order to encourage the commercialization of soybeans and their derivatives, the National Government instructed, through Decree 787/2022 of November 27, the reestablishment of the “Export Increase Program”, effective from the 28th of the same month until December 31, where an exchange rate of $230 per USD 1 is provided for exports of these products (to access Decree 787/2022 click here). In the same vein, in order to boost foreign exchange earnings from inbound tourism, the BCRA resolved, through communication “A” 7630 of November 3, to exclude from the requirement of settlement in the foreign exchange market the income of funds with non-resident cards, charges for tourist services contracted by non-residents and for charges for non-resident passenger transport services. This allows recipients to apply a higher exchange rate to the consumption of non-resident tourists in the country.

In November, the entities’ customers bought USD 926 million in the foreign exchange market, of which the BCRA sold USD 628 million (USD 578 million were purchased within the framework of the Export Increase Program and USD 1,206 million were sold for the rest of the concepts) and the entities USD 223 million. at the same time, the BCRA made net payments through the Local Currency Payment System for USD 72 million.

The “Non-Financial Private Sector” was a net buyer of foreign currency for USD 793 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 1,365 million, 21% less than in the same month of 2021. The lower net income from goods in the sector during November was due to the partial cancellation of the commercial debt that the sector had in September within the framework of the “Export Increase Program” (Decree 576/2022).

The “Real Sector excluding Oilseeds and Cereals”, was a net buyer for a total of USD 1,783 million, exhibiting a year-on-year reduction of 36% in its purchases. They were mainly used to make net payments for imports of goods and services and for travel expenses and other card payments. “Individuals” bought USD 406 million net, basically for card expenditures for consumption with non-resident suppliers (with a net of USD 279 million, showing a drop of 22% compared to the previous month) and for hoarding (with a net of USD 110 million for ticket purchases). The observed reduction in card expenses occurred in the context of General Resolution 5270/2022 established by the AFIP, which established that as of October 12, all monthly card purchases with foreign suppliers that exceed USD 300 have to pay an extra 25% surcharge on the official dollar rate. on account of the Personal Assets Tax.

The “Institutional investors and others” sector, both resident and non-resident, made net sales in the month of USD 31 million.

The foreign exchange current account, which includes net flows from net exports of goods and services and primary and secondary income, registered a deficit of USD 1,201 million. This result was explained by the deficit results of the “Services”, “Primary income” and “Secondary income” accounts of USD 641 million, USD 917 million and USD 3 million respectively, partially offset by net income from transfers for goods of USD 359 million.

The financial account of the “Non-Financial Private Sector” had a deficit of USD 519 million in November, highlighting the records for the cancellations of balances in foreign currency with local entities for the use of cards with non-resident suppliers for USD 262 million (which do not entail a net demand for foreign currency in the financial account)1, the cancellations of financial loans and debt securities for USD 253 million, the cancellation of loans from international organizations for USD 79 million and the expenditures for exchange operations for transfers abroad for USD 41 million, partially offset by income from foreign direct investment for USD 33 million and from foreign assets for USD 86 million.

In November, the operations of the foreign exchange financial account of the “Financial Sector” resulted in a surplus of USD 14 million. This result is mainly explained by the income of USD 4 million for the concept of “Direct investment by non-residents” and the decrease by USD 19 million in the liquid foreign assets of the entities that make up the General Exchange Position (PGC), partially offset by expenditures for the concepts of loans from international organizations and financial loans and credit lines for USD 6 million and USD 3 million, respectively

On the other hand, the operations of the foreign exchange financial account of the General Government and the BCRA resulted in a surplus of USD 95 million, mainly explained by net disbursements from international organizations of USD 109 million and by income from financial loans and credit lines of USD 14 million, partially offset by records of exchange operations for transfers received from abroad for USD 27 million.

In November, the BCRA’s international reserves decreased by USD 667 million, ending the month at a level of USD 38,009 million. This decrease was mainly explained by the BCRA’s sales in the foreign exchange market and net payments through the Local Currency Payment System for USD 745 million, net outflows for payments to the International Monetary Fund and other international organizations for USD 441 million (payments to the IMF were for an equivalent of USD 563 million, SDR 442 million, in interest and commissions) and a reduction in the holdings of the entities by about USD 300 million, movements that were partially offset by the increase in the price in US dollars of the assets that make up the reserves by USD 836 million.