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.

Main aspects

The global economy throughout 2023 was marked by low growth rates and high inflation, particularly in the core measurement. Faced with this situation, the monetary authorities of advanced economies have maintained and even raised interest rates, so they are beginning to show some retraction in price increases. For 2024, it is forecast that the outlook will be lower inflation worldwide, which would open the possibility of a reduction in monetary policy rates.
At the local level, in December the new authorities of the National Government and the BCRA took office,
who took a series of measures with the main objective of giving greater predictability to the exchange market and ordering the commercial debt for imports of goods and services. These measures are
listed in the box of this report “December 2023 Regulations”.
During December, the clients of the entities sold USD 2,289 million in the foreign exchange market
, while the entities sold USD 184 million. For its part, the BCRA bought USD 2,486 million in the
foreign exchange market and made net payments through the Local Currency Payment System (SML) for USD 13 million.
The “Non-Financial Private Sector” was a net seller of foreign currency for USD 2,559 million in the
foreign exchange market. Within this group, the “Oilseeds and cereals” sector recorded net revenues of USD 1,328 million, 63% less than in the same month of 2022. The lower net income from goods in the sector during December is due to the effects of the drought on the exportable product and, in addition, to the fact that a portion of the export collections are not registered in the foreign exchange market, since it was settled through the stock market under the framework of the “Export Increase Program” (see the regulations section). In turn, the “Real Sector excluding Oilseeds and Cereals”, recorded net income of USD 1,436 million, largely explained by the result under the heading “Goods”.
“Individuals” netly purchased USD 277 million, mainly for travel expenses and other consumption made with cards with non-resident suppliers (with a net result of USD 218 million) and for hoarding (with a net of USD 55 million for ticket purchases).
The “Institutional investors and others” sector, both resident and non-resident, made net sales in the month of USD 73 million.
The foreign exchange current account registered a surplus of USD 2,962 million in December, explained by the
surplus of the Goods account of USD 3,381 million, partially offset by the deficits of the Primary Income, Services and Secondary Income accounts of USD 387 million, USD 20 million and USD 12 million, respectively.
The financial account of the “Non-Financial Private Sector” was practically neutral, discounting the records that do not imply net movements in the exchange market (swaps). This result was composed of the records of exchange operations for net transfers abroad for USD 909 million (mainly explained as the counterpart of export collections of the real sector of goods and services not settled in the exchange market and freely available foreign exchange income by individuals). the cancellations of balances in foreign currency with local entities for the use of cards with non-resident suppliers for USD 293 million (which do not entail a net demand Evolution of the Exchange Market and Exchange Balance / December 2023 | BCRA | 5 of foreign currency in the financial account), net outflows from loans from international organizations for USD 121 million, net outflows from local financial loans for USD 72 million and net outflows from other foreign financial debts and debt securities for USD 32 million, partially offset by net income from foreign assets for USD 330 million, foreign direct investment income of USD 87 million and income from the sale of securities of USD 5 million.
The operations of the foreign exchange financial account of the “Financial Sector” resulted in a deficit of USD
1,555 million. This result was mainly explained by the increase in the liquid foreign assets of the entities that make up the General Exchange Position (PGC) by USD 1,484 million and by the net outflows from financial loans of USD 71 million.
The operations of the foreign exchange financial account of the General Government and the BCRA were in deficit by USD 504 million, mainly explained by capital payments to the International Monetary Fund of USD 919 million (SDR 686 million) and by net cancellations of financial loans of USD 6 million, partially offset by net income from loans from international organizations (excluding the IMF) of USD 338 million and net income from asset sales external public sector for about USD 16 million.
In December, the BCRA’s international reserves rose by USD 1,560 million, ending the month at a level of USD 23,073 million. This increase was mainly explained by the liquidation of the BCRA’s net purchases in the foreign exchange market, by the net income of international organizations (except the IMF) and other debt of the General Government and BCRA for USD 180 million, by the increase in the price in US dollars of the assets that make up the reserves for USD 122 million and by the increase in the holdings in foreign currency of the entities. partially offset by principal payments to the International Monetary Fund and by net payments settled by the BCRA through the Local Currency Payment System.