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 October.

Main aspects

In October, companies in the real sector were net sellers of foreign currency for about US$ 1,400 million.

Within that group, the main sector with net supply in historical terms, “Oilseeds and cereals”, had net sales of about US$ 1,300 million, with a year-on-year drop of 21%, possibly generated by the drought that affected its main crops in this year’s harvest.

The rest of the companies in the real sector (“Others in the real sector”) made net sales of about US$ 100 million, reversing their historical behavior as net demanders in the market. The difference with net purchases of US$ 2,200 million in October 2017 is mainly explained by the slowdown in imports in recent months.

“Individuals”, which basically demand foreign currency for hoarding and trips abroad, bought US$ 900 million on a net basis, the lowest level since the relaxation of foreign exchange regulations in December 2015 and less than half of the level of October 2017.

“Institutional investors and others”, both residents and non-residents, had a net demand of US$ 600 million, which represented a third of the average monthly net outflow they had since the beginning of the exchange rate instability last April.

The exchange rate always remained within the “non-intervention zone”, so the Central Bank did not participate in the foreign exchange market and only made direct sales to the National Treasury, which used the resulting funds to meet different obligations in foreign currency.

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 in line with the definitions of the Balance of Payments, registered a deficit of US$ 374 million, with a reduction of US$ 1,900 million compared to the deficit of October of the previous year.

The capital and financial account of the “Non-Financial Private Sector” (NFPS) had a deficit of around US$ 1,300 million, which fell by about US$ 2,100 million compared to the monthly average of the first nine months of 2018, basically due to lower net outflows due to portfolio change, both from residents and non-residents, and to the higher income from direct investment from non-residents and financial debt.

The operations of the capital and financial account of the “Financial Sector” resulted in a deficit of about US$ 1,000 million, basically explained by the increase in the liquid foreign assets of the entities that make up the General Exchange Position and by the primary subscription of securities.

The foreign exchange capital and financial account of the public sector and the BCRA resulted in a surplus of about US$ 6,600 million, mainly explained by the disbursement of the second tranche of the stand-by program agreed with the IMF for US$ 5,668 million and by the income of foreign currency from the National Treasury for net placements of LETES for about US$ 1,100 million.

As a result of the movements described, international reserves increased by US$ 4,952 million, ending the month with a stock of US$ 53,955 million.