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 July.

Main aspects

The global economy continues to recover, but moderating its pace in the face of the uncertainty associated with the armed conflict between Russia and Ukraine and the increase in benchmark interest rates in the world’s main economies due to the rise in inflation mainly as a result of the increase in international energy and food prices and disruptions in input supply chains. In this context, the BCRA continued to improve foreign exchange regulation in order to promote a more efficient allocation of foreign currency. In July, the BCRA sold USD 1,580 million in the foreign exchange market to entities and their customers, who bought USD 740 million and USD 870 million, respectively. Likewise, the BCRA made net payments through the Local Currency Payment System for USD 30 million.

The “Real Sector” was a net buyer of foreign currency for USD 227 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 2,677 million, 19% lower than in the same month of 2021.

The “Real Sector excluding Oilseeds and Cereals” was a net buyer for a total of USD 2,903 million, exhibiting a year-on-year increase of 27%. The purchases were mainly intended to make payments for net imports of goods and services and to pay off financial debt.

The “Individuals” bought USD 688 million net, basically to meet expenses made with cards for consumption with non-resident suppliers and for treasury, for USD 394 million and USD 256 million, respectively.

The “Institutional Investors and Others” sector, both resident and non-resident, made net purchases in the month for USD 23 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 1,302 million. This result was explained by the deficit results of “Services” and “Primary income” of USD 1,065 million and USD 934 million, respectively, partially offset by net income from “Goods” of USD 689 million. The foreign exchange financial account of the “Non-financial private sector” had a deficit of USD 620 million in the month. The records for the cancellations of balances in foreign currency with local entities for the use of cards with non-resident suppliers for USD 368 million (which do not entail a net demand for foreign currency), the formation of foreign assets for USD 164 million and the cancellation of loans abroad, debt securities and with international organizations for USD 121 million stood out.

In July, the operations of the foreign exchange financial account of the “Financial Sector” resulted in a surplus of USD 347 million. This result is mainly explained by the decrease of USD 291 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 the BCRA resulted in a deficit of USD 2,099 million, mainly explained by payments to the International Monetary Fund equivalent to USD 1,961 million (SDR 1,488 million).

In July, the BCRA’s international reserves fell by USD 4,555 million, ending the month at a level of USD 38,232 million. This decrease was mainly explained by net payments to the International Monetary Fund, other credit and interest and principal agencies on foreign currency securities issued by the National Government for the equivalent of USD 2,667 million and by the BCRA’s net sales in the foreign exchange market. In addition, there was a fall in the price in U.S. dollars of the assets that make up the reserves, as well as in the foreign currency holdings of the entities.