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 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 October, the entities’ customers bought USD 716 million and the entities USD 37 million in the foreign exchange market, of which the BCRA sold for USD 700 million, while making net payments through the Local Currency Payment System for USD 53 million. In addition, the BCRA made direct sales to the National Treasury for USD 1,442 million.

The “Non-Financial Private Sector” was a net buyer of foreign currency for USD 766 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 853 million, 65% less than in the same month of 2021. The lower net income from goods in the sector during October was due to the partial cancellation of the commercial debt that the sector had the previous month within the framework of the “Export Increase Program”.

The “Real Sector excluding Oilseeds and Cereals”, was a net buyer for a total of USD 1,084 million, exhibiting a year-on-year reduction of 27%. The purchases were mainly intended to make net payments for imports of goods and services and to pay off financial debt.

“Individuals” bought USD 464 million net, basically for expenses made with cards for consumption with non-resident suppliers (with a net of USD 327 million, showing a drop of 16% compared to the previous month) and for hoarding (with a net of USD 117 million for ticket purchases). The observed reduction in card expenses occurred in the context of the entry into force of General Resolution 5270/2022 established by the AFIP, which established that as of October 12, all monthly card purchases that exceed US$ 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 purchases in the month for USD 70 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 664 million. This result was explained by the deficit results of the “Services”, “Primary income” and “Secondary income” accounts of USD 799 million, USD 217 million and USD 12 million respectively, partially offset by net income from transfers for goods of USD 363 million.

The financial account of the “Non-Financial Private Sector” had a deficit of USD 357 million in October, 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 359 million (which do not entail a net demand for foreign currency), the cancellations of financial loans and debt securities for USD 117 million, partially offset by income from exchange operations for transfers abroad for USD 69 million, foreign direct investment for USD 40 million and foreign assets for USD 16 million.

In October, the operations of the foreign exchange financial account of the “Financial Sector” resulted in a surplus of USD 538 million. This result is mainly explained by the decrease of USD 499 million in the liquid foreign assets of the entities that make up the General Exchange Position (PGC) and by income from loans and credit lines of USD 39 million.

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 2,064 million, mainly explained by gross disbursements of the International Monetary Fund for an equivalent of USD 3,862 million (SDR 3,000 million) and by net income from “Loans from other International Organizations and others” for USD 918 million. partially offset by principal payments to the International Monetary Fund for an equivalent of USD 2,541 million (1,975 million SDRs).

In October, the BCRA’s international reserves increased by USD 1,051 million, ending the month at a level of USD 38,676 million. This increase was mainly explained by gross disbursements by the International Monetary Fund of an equivalent of USD 3,862 million (SDR 3,000 million) and net income by other international organizations of USD 918 million, partially offset by capital payments to the International Monetary Fund of an equivalent of USD 2,541 million (SDR 1,975 million). due to the fall in the price in U.S. dollars of the assets that make up the reserves for USD 530 million, due to sales by the BCRA in the foreign exchange market and net payments through the Local Currency Payment System.