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

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 implemented regulatory modifications that affect the foreign exchange market (Communication “A” 7030 and its amendments, and Communication “A” 7106, among others) in order to promote a more efficient allocation of foreign currency. In this context, the customers of the entities, and the latter, bought USD 1,072 million and USD 7 million in the foreign exchange market, respectively, totaling USD 1,079 million, which were sold by the BCRA. Additionally, the monetary authority made sales directly to the National Treasury for USD 193 million.

The real sector was a net buyer of foreign currency for USD 388 million.

Within this group, the main sector in terms of historical net sales, “Oilseeds and Cereals”, recorded net revenues of USD 1,320 million, with a reduction of 15% compared to those recorded in the same period of 2019. This level of income was below the estimates of net exports of goods for the month, which would imply that the commercial debt cancellations observed for much of the year continued. The level of foreign indebtedness of the sector for export financing continues at minimum levels.

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 1,708 million, which meant a decrease in its net purchases of approximately USD 460 million compared to the immediately previous month. The purchases were mainly intended to make payments for goods and services, and to pay off financial debt.

“Individuals” bought USD 339 million on a net basis, basically for treasury tickets (USD 199 million, with a decrease of 68% compared to the previous month, as a result of the regulatory changes introduced in mid-September), and for expenses made with cards for consumption abroad (about USD 102 million, with a drop of 74% 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 residents and non-residents, made net purchases in the month for USD 192 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 deficit of USD 495 million, explained by net purchases by “Primary income” and “Services”.

The financial account of the “Non-Financial Private Sector” had a deficit of USD 687 million, as a result of the net formation of foreign assets and the net cancellations of financial debt.

The operations of the foreign exchange financial account of the “Financial Sector” resulted in a surplus of USD 371 million, explained by the decrease in the liquid foreign assets of the entities that make up the General Exchange Position (PGC) by USD 450 million, partially offset by the cancellations of financial debt and credit lines for USD 80 million.

The operations of the foreign exchange financial account of the “General Government and BCRA” resulted in a deficit of USD 202 million, mainly explained by the net outflows for financial debt.

During October, the BCRA’s international reserves decreased by USD 1,522 million, ending the month at a level of USD 39,856 million.