Report on the Evolution of the Foreign Exchange Market and the Foreign Exchange Balance

This report analyzes the evolution of purchases and sales of foreign currency in the foreign exchange market, corresponding to September.

Main aspects

The domestic and global economy continues to undergo a gradual recovery from the health and economic crisis caused by the COVID-19 pandemic, which impacted both the level of global and local activity, trade flows and capital movements. In recent months, the BCRA has perfected foreign exchange regulations in order to promote a more efficient allocation of foreign currency. In this context, the entities and their customers bought USD 124 million and USD 905 million net in the foreign exchange market, respectively, which were sold by the BCRA. In addition, the National Treasury made direct sales to the BCRA for USD 4,014 million.

The real sector was a net buyer of foreign currency for USD 172 million. Within this group, the main sector in terms of net sales in the foreign exchange market, “Oilseeds and Cereals”, recorded net revenues of USD 2,463 million, with a year-on-year increase of 56%, in a context of higher international prices of agricultural products. For its part, the sector’s FOB exports reached an all-time high in nominal terms of USD 3,724 million in September, placing it above the income from collections of exports of goods, which would imply a reduction in the level of commercial debt of the sector in the month.

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 2,636 million. The purchases were mainly intended to make payments for imports of goods and services, and to pay off financial debt.

The “Individuals” bought USD 326 million net, basically for expenses made with cards for consumption with non-resident suppliers and for treasury, for USD 149 million and USD 134 million, respectively in net terms.

The “Institutional Investors and Others” sector, both resident and non-resident, made net purchases in the month for USD 217 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 785 million. This result was mainly explained by the net expenditures on “Services” and “Primary income” of USD 558 million and USD 529 million, respectively, partially offset by net income from “Goods” of USD 316 million.

The foreign exchange financial account of the “Non-Financial Private Sector” had a deficit of USD 378 million in the month, highlighting the net cancellations of financial debt for USD 424 million.

The operations of the foreign exchange financial account of the “Financial Sector” resulted in a surplus of USD 293 million, basically explained by the fall of USD 307 million in the liquid foreign assets of the entities that make up the General Exchange Position (PGC).

On the other hand, the operations of the foreign exchange financial account of the “General Government and BCRA” resulted in a deficit of USD 2,106 million, mainly explained by the cancellation of capital maturities with the International Monetary Fund.

In September, the BCRA’s international reserves decreased by USD 3,269 million, ending the month at a level of USD 42,911 million.