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Transactions in the Foreign Exchange Market and Exchange Balance | BCRA | 1

Transactions in the Foreign Exchange Market and Exchange Balance

Overview

Foreign Exchange Transactions and Exchange Balance in January 2018

In January 2018, the National Treasury sold US$ 3 billion, which were bought directly by the Central

Bank of Argentina. In turn, institutions, together with entities from the public sector, sold US$ 500

million and US$ 430 million, respectively, which were purchased by private sector clients through the Foreign Exchange (Forex) Market.

The volume traded reached a total of US$ 51.99 billion (equivalent to a daily average of US$ 2.36

billion), maximum level on record in the history of the foreign exchange market, up 4% against the

amount recorded in the previous month. This increase resulted from the record-high levels in the transactions made between authorized institutions, and between the latter and their clients.

Current account transactions in the exchange balance evidenced a deficit of US$ 1.95 billion, resulting

mainly from net outflows for the “Services” and “Primary Income” accounts for US$ 1.44 billion and

US$ 807 million, respectively. In turn, these movements were partially offset by net inflows from the “Goods” account for US$ 281 million; this surplus was due to collections on exports for US$ 5.03

billion and payment for imports for US$ 4.74 billion.

The capital and financial account pertaining to the “Non-Financial Private Sector” (SPNF) recorded

net outflows for US$ 846 million, thus exhibiting a drop of US$ 1.34 billion against the figures

recorded in the same month of 2017. The main reason behind this drop was a reversal in the result of

purchase and sale transactions made by institutions with securities in the secondary market for US$

1.13 billion.

The capital and financial account transactions of the “Financial Sector” resulted in a surplus of US$ 707 million, mainly explained by a fall in liquid external assets of entities making up the Exchange

Position (PGC) for US$ 640 million and net inflows from financial loans and debt securities for US$

188 million, partially offset by the use of funds for the primary market underwriting of securities for US$ 120 million.

The foreign exchange capital and financial account of the public sector and the BCRA evidenced a surplus of US$ 9.09 billion, mainly due to inflows in foreign currency of the National Treasury because

of the net issue of International Bonds for US$ 9 billion (at five, ten and thirty years).

As a result of these transactions, international reserves held by the BCRA went up US$ 6.97 billion over

the month, reaching a historical peak of US$ 63.91 billion on January 11, 2018, and closing the month

with a stock of t US$ 62.02 billion.


I. Transactions in the Foreign Exchange Market1

In January 2018, the BCRA made direct purchases from the National Treasury for a total of US$ 3 billion. In

turn, institutions, together with the remaining entities of the public sector, sold US$ 500 million and US$ 430

million, respectively, which were purchased by clients from the private sector through the foreign exchange

market (see Chart I.1).

Explanatory Notes

Pursuant to Communication “A” 6244, as from July 1st, 2017, new provisions entered into force to regulate

the foreign exchange market, and among the changes made, such provisions established that the information

of reasons (headings) for the transaction was no longer a sworn statement but it was only required for

statistical purposes. This circumstance limits the historical comparison of series by heading.

Another situation that must be explained is that when funds are cleared into the country from abroad, there is

an option to receive an equivalent amount in pesos (an “exchange transaction”) or a direct deposit may be

requested in a foreign currency local account (“swap transaction”). Even though, in both cases, the inflow is

recorded for the heading corresponding to the transfer (+ sign), the difference lies in the fact that in the case of

1 The Central Bank’s website (www.bcra.gob.ar) contains the different statistical series of the Foreign Exchange Market (to access the statistical series, click here), together with an annex broken down by sector and main headings (to access the statistical Annex of the exchange balance, click here). In addition, it is possible to go over the “Main differences between the balance of payments and the foreign exchange balance” (available in the “Publications & Statistics” section, subsection “Foreign Sector” / “Foreign Exchange Market”, to access the text click here).

3.000

430

-930

500

-3.000

National Treasury Other Pub. Sec. Priv. Sec. Institutions BCRA

Chart I.1 Result of Transactions Broken Down by Sector – January 2018

SALES

PURCHASES

INSTITUTIONS CLIENTS: -500

Million dollars

http://www.bcra.gov.ar/

http://www.bcra.gov.ar/Pdfs/PublicacionesEstadisticas/opecames.xls

http://www.bcra.gov.ar/Pdfs/PublicacionesEstadisticas/Anexo.xls

http://www.bcra.gov.ar/Pdfs/PublicacionesEstadisticas/diferencias.pdf


a swap, a second record is made for the same amount (– sign) for the deposit of funds in the account, as if the

foreign currency were purchased (this second record is included in an account within the financial account,

not subtracting such amount from the specific account where the funds were deposited). Likewise, a payment

abroad with foreign currency deposited is recorded for the heading corresponding to payment (- sign) and

another record (+ sign) for the debit from the account. Consequently, the total result in the exchange market

of swap transactions is neutral.

Taking into account the information appearing in the preceding “Explanatory Notes”, and the effects on the

reading of information, the result of institutions’ foreign exchange transactions with their clients by sector was

broken down to differentiate net purchasers from net sellers (see Chart I.2). This analysis reveals that the main

sectors with net purchases were natural persons (included in “Private Sector – Other”) and net importers, such

as the “Automobile Industry”, followed by the sectors of “Machinery and Equipment”, “Commerce” and

“Chemical, Rubber and Plastic Industries” (these four sectors accounted for 63% of payments for goods-

related imports made in January through the foreign exchange market).

This deficit was partially funded by net sellers of foreign currency, among which “Oilseeds and Grains”,

“Public Sector”, “Food, Beverages and Tobacco” and “Mining” stood out.

In terms of the heading behind the reason of entities’ foreign exchange transactions with their clients, the main

factor explaining January result was the net purchase of foreign assets by the non-financial private sector (see

Chart I.3) for US$ 3.122 billion, one of the highest amounts on record since the regulatory flexibilization of the

market. Even though the most important component of this total was the net purchase of banknotes for US$

2 See Chart 7. “Purchase of Foreign Assets by the Non-Financial Private Sector”, appearing in the “Statistical series of the Foreign Exchange Market” (to see the statistical series click here).

2.179

430

291

283

169

-139

-227

-410

-506

-538

-698

-1.334

-500

Grains and Oilseeds

Public Sector

Foodstuff, Beverages and Tobacco

Mining

Agriculture, Cattle Raise and Other Primary Production Activities

Tourism and Accommodation Services

Transportation

Chemical Manufacturing, Rubber and Plastic

Retail and Wholesale Business

Machinery and Equipment

Motor Vehicles Industry

Other Business From The Private Sector

Total

Chart I.2 Institutions with Clients by Sector in the MULC – January 2018

Million dollars

SALES

PURCHASES



1.61 billion, these purchases went down by US$ 835 million against December 2017. In turn, the net transfers

abroad made by residents for US$ 1.52 billion mainly explained the abovementioned peak. In this sense, it is

important to highlight that, out of this total transferred abroad, around US$ 854 million were transferred

directly from local accounts in foreign currency without impacting on the foreign exchange market.

Other factors behind net purchases were the net outflows for “Services” for US$ 1.36 billion, within which

spending of residents for travel, passenger transport and other payments abroad made with cards (see Box 1 of

the Services Section to properly understand how these payments are broken down and how the “Travel” and “Passenger Transport” accounts are estimated in our country), which usually go up during the

summer season, as well as net payments for “Primary and Secondary Income”, which totaled US$ 252 million.

Conversely, among the main sources of the Forex Market, the following stood out: net inflows from the

transactions of securities of the institutions for US$ 922 million (including primary market underwriting and

secondary market transactions), net inflows from abroad and settlements of financial loans and debt securities

for US$ 8433 million, and investments by nonresidents for US$ 624 million. Likewise, sales in foreign

currency by other institutions from the public sector were also observed for a total of US$ 450 million, mainly

deriving from loan taking with international organizations, included in the “Financial Debt and Other” account

(Chart I.3).

In turn, the transactions for “Goods” ended January with a net inflow for US$ 281 million due to collections on

exports for US$ 5.03 billion (down 1% in year-on-year terms) and payment of imports for US$ 4.74 billion (up

18% y.o.y.).

Transactions in which clients do not report the heading (equivalent to 3% of the total volume traded in the

market) accounted for a net inflow of US$ 573 million, mainly related to repatriation of funds by residents

from their own accounts abroad and to inflows for services rendered abroad.

3 This figure excludes the record of foreign currency purchases to be delivered to the institution to pay the balance in foreign currency for the use of cards abroad, which is estimated to stand at US$ 400 million in January 2018. (See the item of the memorandum of Chart 1. “Net purchases of bills and coins to clients” appearing in the “Statistical Series of the Foreign Exchange Market”, click here). These local debt settlement transactions in foreign currency with institutions belonging to the system do not imply a net demand in the whole system, made up by institutions and the Central Bank. The deficit for these uses was calculated in the heading “Travel, Passenger Transport and Other Expenses Paid with Cards” at the time of transfers of payments abroad.



As regards swap transactions, which imply a change in instrument holdings in foreign currency between

domestic accounts and foreign accounts, several movements that led to net outflows of funds were recorded.

In fact, there was a drop of 854 million in net deposits in foreign currency for the purchase of foreign assets as

well as payments for goods-related imports for US$ 86 million. Conversely, there were inflows without

reporting the heading (US$ 341 million) and for financial debt (US$ 78 million). As a result, swap transactions

accounted for net outflows of funds abroad for US$ 537 million (see Chart I.4). It is worth pointing out that, as

stated in the “Explanatory Notes”, this amount appears with the opposite sign in Chart I.3 precisely to offset

the effect of these transactions in the result of the foreign exchange market.

281

-1.359

-252

-3.124

922624 537

1.299

573

-500

Goods Services Primary andSecondary

Income

Non-financialprivate sector

externalassets

Transactionswith

securities

Non-residentsinvestments

Swaps FinancialLoans and

others

Non reportedconcept

Clients

Chart I.3 Free and Single Foreign Exchange Market – Clients – January 2018

Millions of dollars

*Note: the total result in the exchange market of swap transactions is neutral, the inflow is recorded for the heading corresponding to the transfer (+ sign), and a second record is made for the same amount (– sign) for the deposit of funds in the account, as if the foreign currency were purchased.


In turn, the BCRA, in addition to the direct net purchases from the National Treasury for US$ 3 billion, made

payments for foreign trade transactions arranged through the Domestic Currency Payment System (Sistema de

Pagos en Monedas Locales, “SML”) in force with Brazil and Uruguay and through ALADI (Latin American

Integration Association) for US$ 134 million (see Chart I.5).

During the first month of 2018, the main factor behind the increase in international reserves was the foreign

currency inflow of the National Treasury due to the issue of bonds in the international market (at five, ten and

-86

12

-31

-854

4 78341

-537

Goods Services Primary andSecondary

Income

Non-financialprivate sector

external assets

Non-residentsinvestments

Financial Loansand others

Non reportedconcept

Net change oflocal deposits forswap transactions

Chart I.4 Net Change of Local Deposits for Swap Transactions

Millions de dollars

*Note: Exchange transactions generate a direct impact on local deposits in foreign currency of the system

-134

0

3.000

-3.000

10.287

-2.105

-1.079

6.969

SML and ALADI BCRA MULC Direct purchasesto the NT

National Treasurydeposit variations

for direct sales

National Treasuryof issues

National Treasurypaid to Int. Org.And securities

Other netmovements

InternationalReserves variation

Chart I.5. Change in BCRA’s International Reserves – January 2018

*Note: Includes, among other operations, changes in the accounts of entities in foreign currency, the performance of reserves, adjustments by exchange rate and Valuation, purchase and sale of securities, transfer of National Treasury accounts that are part of the international reserves and operations of the BCRA.

Million dollars

BCRA Purchases: +3.000


thirty years) for a total of US$ 9 billion, since the issue of the National Treasury Bills (LETES) for US$ 1.29

billion4 was used to pay the maturities of previous issues (US$ 1.25 billion). In turn, a portion of these funds

was used to pay the maturities of principal and interest with international organizations and holders of other

securities denominated in foreign currency for around US$ 860 million5.

Lastly, there was a decrease of current accounts in dollars of banks with the Central Bank due to the drop of

deposits from the non-financial private sector, which was explained above in this section.

In view of all these transactions, BCRA’s international reserves went up US$ 6.97 billion during January,

reaching a historical peak of US$ 63.91 billion on January 11, 2018 and closing with a stock of US$ 62.02

billion by the end of the month (see Chart I.6).

II. Volumes Traded in the Foreign Exchange Market6

In January, the volume traded in the foreign exchange market7 totaled US$ 51.99 billion (a daily average of

US$ 2.36 billion), reaching the maximum level on record in the history of the foreign exchange market, and

4 Besides, there were issues of LETES denominated in dollars and underwritten in pesos for an amount equivalent to US$ 544 million which were not initially recorded on the exchange balance. These transactions are not included in the exchange balance at the time of underwriting as there is no transaction in foreign currency involved at this initial stage. The payment made in foreign currency by the National Treasury is included at the time of maturity.

5 This figure includes intra-public sector collections due to bond holdings.

6 The Central Bank’s website contains the quarterly ranking broken down by institution for the volume traded in the foreign exchange market with clients (to access the Ranking click here).

7 It includes the volume traded by institutions authorized to carry out foreign exchange transactions with their clients, between authorized institutions and between the latter and the BCRA. It is worth noting that the volume traded between institutions and the BCRA implies the full

Chart I.6. BCRA’s International Reserves

62.024

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

J-03 J-03 J-04 J-04 J-05 J-05 J-06 J-06 J-07 J-07 J-08 J-08 J-09 J-09 J-10 J-10 J-11 J-11 J-12 J-12 J-13 J-13 J-14 J-14 J-15 J-15 J-16 J-16 J-17 J-17 D-18

Mil lion dollars

39.000

42.000

45.000

48.000

51.000

54.000

57.000

60.000

63.000

66.000

Jan-17 Apr-17 Jul-17 Oct-17 Jan-18

Diary - Year 2017-18

At the end of each month

http://www.bcra.gov.ar/Pdfs/PublicacionesEstadisticas/Ranking.xls


exceeding by 4% the record level recorded in December 2017. This result was mainly due to transactions

arranged between authorized institutions, and transactions between the latter and their clients (see Chart II.1).

In the month under analysis, the transactions made between entities and their clients8 accounted for 69% of the

total volume traded in the Forex market (down 6 p.p. against January 2017), while the remaining 31% was

arranged among authorized institutions.

Within the framework of a more dynamic and unrestricted market, foreign exchange transactions between

banks and other financial and exchange institutions are gaining ground and closed January with a record-high

volume of US$ 15.94 billion. If this total is broken down by type of institution, foreign private banks

accounted for a little over half the total (51.6%) while national private banks accounted for 43% of the total

and the remaining 5.5% was distributed between public banks (with a share of 5%) and foreign exchange firms

and brokers (0.5%).

In turn, the volume traded between authorized institutions and their clients totaled US$ 36.05 billion (up 70%

in year-on-year terms). Despite the increase in the number of institutions that were authorized to operate in

recent months, there was virtually no change in the concentration since the transactions continued to be made

by a reduced number of institutions: out of the 101 institutions that carried out foreign exchange transactions

over the month, the first ten institutions (all of them banks) accounted for 81% of such transactions.

Upon analyzing the evolution of the volume traded with clients according to the share of the main headings,

the transactions included in the “Capital and Financial Account and Other” recorded a rise of 19 percentage

value of the daily net balance in order to count only foreign exchange transactions against pesos, aiming at removing from the analysis any transactions where there are changes of instrument with no difference as to the exchange rate agreed upon, for example, in the case of swaps.

8 The record for underwriting of Central Bank Bills and the swap transactions of clients with other countries that totaled US$ 2.3 billion in January 2018 are excluded from the volume traded by authorized institutions and their clients.

0

10.000

20.000

30.000

40.000

50.000

60.000

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18

Chart II.1. Volume Traded in the Forex Market (MULC)

Total volume traded in the MULC Volume traded between authorized institutions and their clients

Volume traded between authorized institutions Volume traded between authorized institutions and BCRA

Millons of dollars


points against the figure recorded in January 2017 (see Chart II.2) to the detriment of the transactions for the

remaining headings (“Goods”, “Services” and “Primary and Secondary Income”, which posted drops of 13

p.p., 4 p.p. and 1 p.p., respectively). By the end of the first month of the year, the transactions of the “Capital

and Financial Account and Other” accounted for 64% of the volume traded with clients, mainly due to the

incidence of securities transactions, financial loans and investments by nonresidents (see Chart II.2), followed

by “Goods” and “Services” with a share of 27% and 8%, respectively.

The distribution of transactions with clients broken down by type of institution was once again led by foreign

private banks, which accounted for 68.1% of transactions, virtually tripling the volume of national private

banks, which represented 22.7%, while public banks (8.7%) and foreign exchange firms and brokers (0.5%)

accounted for the remaining 9.2%.

From the standpoint of the currency used, 97.5% of transactions between institutions and their clients were

made in US dollars, while the remaining currencies used for foreign exchange transactions were distributed as

follows: euros (2.2%), and other 42 currencies (0.3%).

II) Exchange Balance9

III) a. Exchange Current Account

Current account transactions on the exchange balance evidenced a deficit amounting to US$ 1.95 billion in

January 2018, mainly resulting from net outflows for the “Services” and “Primary Income” accounts for US$

9 The exchange balance includes transactions carried out by institutions with their clients through the foreign exchange market and those carried out directly with international reserves of the Central Bank recorded in its equity evolution.

0

4.000

8.000

12.000

16.000

20.000

24.000

28.000

32.000

36.000

40.000

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18

Chart II.2. Volume Traded with Clients in the Forex Market and Share per heading

Volume traded between authorized institutions and their clients Goods Services Primary and Secondary Income Capital and financial

Millions of dollarsShare


1.44 billion and US$ 807 million, respectively, which were, in turn, slightly offset by net inflows from the

“Goods” account for US$ 281 million and the “Secondary Income” account for US$ 18 million.

The deficit of the exchange current account went up US$ 1.27 billion in year-on-year terms. The main reason

behind this increase is the drop in net inflows in the “Goods” account and the rise in net payments of the

“Services” account.

III) a.1. Goods

Transactions related to transfers of goods on the exchange balance exhibited net inflows from abroad for US$

281 million, resulting from receipts from exports for US$ 5.03 billion and from the payment of imports for

US$ 4.74 billion (see Chart III.1). If compared to the performance observed in January 2017, receipts from

goods exports fell by 1% while payments for good imports went up 18%.

III) a.1.1. Collections on Goods Exports

The “Oilseeds, Oils and Grains” sector settled receipts from goods exports for US$ 2.3 billion in January,

down 5% against the same month of 2017 (see Chart III.2).

The year-on-year decrease was mainly due to lower inflows from advances and international prefinancing,

which totaled US$ 771 million in January, thus posting a 32% year-on-year drop (equivalent to around US$

Foreign Exchange Current Account

In millons of dollars

Fecha nov-16 dic-16 ene-17 feb-17 mar-17 abr-17 may-17 jun-17 jul-17 ago-17 sep-17 oct-17 nov-17 dic-17 ene-18

Exchange current account -1.088 -1.395 -677 -909 -811 -1.315 -961 -1.522 -1.388 -1.139 -1.595 -2.258 -2.713 -1.765 -1.947

Goods 630 443 1.057 252 640 731 863 373 302 295 -97 -132 -476 220 281

Services -655 -584 -1.151 -908 -833 -701 -762 -740 -970 -1.044 -913 -983 -951 -891 -1.440

Primary income -1.164 -1.302 -627 -277 -661 -1.377 -1.095 -1.190 -749 -413 -616 -1.173 -1.310 -1.118 -807

Secondary income 102 49 44 24 43 32 33 34 29 24 31 30 24 25 18

-9.000

-7.000

-5.000

-3.000

-1.000

1.000

3.000

5.000

7.000

9.000

-9.000

-7.000

-5.000

-3.000

-1.000

1.000

3.000

5.000

7.000

9.000

Jan-14 May-14 Sept-14 Jan-15 May-15 Sept-15 Jan-16 May-16 Sept-16 Jan-17 May-17 sep-17

Million dollars

Chart III.1 Goods-Related Transfers

Payments for goods imports Collectios on goods exports Goods related transfers

-1%

+18%


360 million). This drop was partially offset by higher inflows from prefinancing granted by domestic banks10,

which amounted to US$ 566 million, thus posting a year-on-year rise of 51% (around US$ 200 million). The

remaining collections on exports stood at around US$ 960 million, up 5% against January 2017.

Regarding the ratio of exports to inflows from collection on goods, in January, total settlements through the

foreign exchange market exceeded exports for around US$ 480 million, only US$ 50 million more than the

excess settlements over exports seen in January 201711 (see Chart III.3).

On the other hand, the Export Sworn Statements (Declaraciones Juradas de Ventas al Exterior (DJVE))12

totaled US$ 1.62 billion in January, posting a 21% drop in year-on-year terms13. This fall was mainly due to

lower foreign sales of soybean pellets for around US$ 850 million. Conversely, the higher foreign sales of corn

10 In order to explain the increase in prefinancing granted by domestic banks, it is worth mentioning that a set of innovative regulations impacted positively on the decisions made by exporters, such as the increase in the lending capacity in foreign currency by domestic banks (Communications “A” 5908 and “A” 6031) and, in the same sense, the generation of a higher lending capacity for the financial sector (reduction of the minimum reserve requirements – Communication “A” 5873).

11 For the series of exports to be compared to that of settlements through the foreign exchange market, the basis for calculation considered is the total value of shipment carried out by a single group of companies classified within the “Oilseeds and Grains” sector. Even though such companies carry out most sales of products of the complex, the evolution does not necessarily match, exactly, that evidenced by exports at product level.

12 DJVEs are sworn statements to which exporters of products of an agricultural origin falling under the scope of Law 21453 are subject. They are daily published by the Ministry of Agribusiness (Minagro). In order to reflect foreign sales of products of an agricultural origin more accurately, DJVEs considered herein are adjusted taking also into account exports of biodiesel and soybean shells pellets, two products that do not require any DJVE.

13 This drop resulted from negative changes in amounts of 23% and positive changes in prices of 1%.

1.428

1.184

1.399

2.7432.726

3.284

2.913

1.762

1.3651.381

656

2.134

2.891

1.844

2.039

2.500

3.397

2.4432.327

1.762

1.998

1.9371.824

1.741

2.420

1.412

2.252 2.189

3.035

2.719

2.553 2.637

2.145

1.808

1.705 1.760

2.299

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18

Millions of US$

Chart III.2. Receipts from Exports of Oilseeds and Grains

Advance collections from clients and prefinancing of export Rest of export collections

-4%

+102%

-16%-5%


(for around US$ 340 million), barley (for around US$ 105 million) and biodiesel (for around US$ 75 million14)

partially offset the abovementioned drop.

Regarding domestic trading, the purchases of soybean at a set price15 stood slightly above the level of the

previous cycle (2015/16 cycle). However, it is worth mentioning that both cycles were lagging considerably

behind previous cycles. In turn, corn and wheat continued exhibiting a historical record of internal purchases

of the exporting sector, mainly explained by a significant production growth16 of these crops, which translated

later on into a remarkable increase of its foreign sales.

In turn, receipts from exports of goods from the remaining sectors totaled US$ 2.73 billion in January, up 2%

against the same month of 2017 (see Chart III.4).

14 Even though the US increased the tariffs on Argentine biodiesel (standing between 54.36% and 70.05%) as an “anti-dumping” measure in August 2017 due to a claim by the National Biodiesel Board (NBB) related to an alleged subsidy, by the end of September the reduction of anti-dumping duties in Europe allowed to partially offset the loss of the US market.

15 It is important to highlight that the settlement of foreign currency is mainly related to the purchase of grains which will be later exported, either in the same condition or as processed products following industrial processes.

16 The considerable rise in production was due to the elimination of restrictions on exports and of exports duties. As a result, the domestic trading of wheat, by the closing date of this report, amounted to 13 million tons, against the 7.4 million tons accumulated by the end of January 2017 (up 74%). As regards corn, total domestic purchases in late January 2018 reached 26.8 million tons against the 19.1 million tons purchased in the same period of 2017 (up 40%). Consequently, in this respect, the domestic trading of both grains broke a new historical record.


A sector-by-sector breakdown shows that the rise in nominal terms was led by “Food, Beverages and

Tobacco”, which recorded a 16% increase in inflows from the collections on exports against the same period

of 2017. It was followed by “Mining” (up 19%), and the “Textile and Leather Industry” (up 40%), among

other sectors. Conversely, the “Automobile Industry” and the “Chemical, Rubber and Plastic Industries”

partially offset such increases and recorded year-on-year drops of 26% and 22% respectively.

III) a.1.2. Payment for Goods Imports

Payments for goods imports on the exchange balance totaled US$ 4.74 billion in January 201817, up 18%

against the figure recorded in January 2017 (US$ 4.03 billion).

As regards the distribution per sector, there was a widespread rise led by “Machinery and Equipment”,

“Commerce” and “Chemical, Rubber and Plastic Industries”. In turn the “Automobile Industry”, “Energy” and

“Manufacture of Common Metals” sectors recorded slight year-on-year drops (see Chart III.5).

17 In this sense, it is worth mentioning that this figure does not include the payment of imports made from accounts of residents abroad.

16%

-26%

-22%19%

7%

19%

40%

-9%-2% 12%

0

100

200

300

400

500

600

700

800

Foodstuff,Beverages and

Tobacco

AutomotiveIndustry

ChemicalManufacturing,

Rubber and Plastic

Mining Oil Agriculture, CattleRaise and Other

Primary ProductionActivities

Textile Business andLeather Tanning

Common MetalsManufacturing

Machinery andEquipment

Retail andWholesale Business

Million dollars

Chart III.4 Receipts from Goods Exports from the Remaining Sectors (excluding the Oilseeds and Grains sector)

January 2017: US$ 2.670 millions


y.o.y.: +2%


Despite the fact that payments of the “Automobile Industry” evidenced a 6% year-on-year drop in January, it

continued to be the sector with the highest payments for goods imports through the foreign exchange market.

However, such decrease in outflows was not enough to offset the significant drop in inflows from receipts

from exports recorded by the sector, which ended the month with a 10% year-on-year increase in net payments

(see Chart III.6).

All of the above is in line with the 38% rise of sales from automotive terminals to car dealers selling imported

vehicles, which exceeded the 7% rise in the exports of the sector (explained by a 66% hike in locally-produced

cars and a 25% drop in locally-produced utility vehicles)18.

18 Source: Association of Automobile Manufacturers (Adefa).

-6%

17%

51%61%

-7%

18%

35% 18%

-29% 18%

0

100

200

300

400

500

600

700

800

900

1.000

1.100

1.200

AutomotiveIndustry

ChemicalManufacturing,

Rubber and Plastic

Retail andWholesaleBusiness

Machinery andEquipment

Energy Foodstuff,Beverages and

Tobacco

Textile Businessand Leather

Tanning

OtherManufacturing

Industries

Common MetalsManufacturing

Paper Production,Editing and

Printing

Million dollars

Chart III. 5 Payments for Goods Imports per Sector



y.o.y.: +18%

*Energy: includes oil, electricity and gas.


In turn, the “Energy” sector recorded the lowest figure for the first month of the year in terms of goods export

payments since 2010, totaling US$ 296 million (7% y.o.y. drop). This figure resulted from the “Oil” sector

(see Chart III.7).

Finally, upon analyzing outflows for goods imports on the exchange balance based on the method of payment

used (see Chart III.8), the year-on-year increase in payments in January mainly resulted from rises in advance

-610

-176 -218

-321 -276

-204 -213

-116 -147 -178 -236

-285 -248

-132

-310 -293 -370 -374 -350 -327 -346

-287

-162 -86 -58

-358

-541

-875

-710

-623 -574

-705 -651 -630

-450 -501

-620 -679

-728

-601

-693 -773

-728

-617

-827

-671 -673 -740

-681

-1.500

-1.250

-1.000

-750

-500

-250

0

250

500

750

1.000

1.250

1.500

Jan-14 May-14 Sept-14 Jan-15 May-15 Sept-15 Jan-16 May-16 Sept-16 Jan-17 May-17 Sept-17 Jan-18

Million dollars

Chart III.6 Automobile Sector. Goods-Related Transfers

Collections on goods exports Payments for goods imports Goods-related transfers

-

1.063

816

1.079

1.484

1.651

1.260

1.369

1.242

960

1.083

833

751

462

531

678 728 749

1.203

1.021

868 804

453 489 502 509

408 439

366

664

955

863

562

472

393

292 348

318 257

315

389

730

1.032

552 559

405 431

392

250 292

0

250

500

750

1.000

1.250

1.500

1.750

2.000

Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18

Chart III.7 Payments for Goods Imports. "Energy" sector

Gas (Extraction, Transportation, Distribution) Electricity (Generation, Transportation, Distribution) Oil

Million dollars


payments and deferred payments (up 49% and 16%, respectively), while payments at sight remained at the

same level of the previous year.

III) a.2. Services, Primary Income and Secondary Income

The net outflows for services transactions increased by nearly US$ 300 million against January 2017 and

totaled US$ 1.36 billion in January 2018. This result was accounted for by net outflows for the “Travel,

Passenger Transport and Other Expenses Paid with Cards” for US$ 1.34 billion19, “Freight and Insurance” for

US$ 57 million and “Other Services” for US$ 142 million, which were partially offset by net inflows from

“Business, Professional and Technical Services” for US$ 179 million (see Chart III.9).

19 It is worth pointing out that the transfers made to foreign countries in order to settle the balances with international credit card issuers include both the purchases made by residents travelling abroad and the remote purchases made from foreign suppliers. In turn, the inflows include the remote purchases made with cards by non-residents from Argentine suppliers.


The net deficit of the “Travel, Passenger Transport, and Other Expenses Paid with Cards” account posted a 6%

y.o.y. hike, basically explained by a rise in the amount of outflows that exceeded the increase in inflows (see

Chart III.10). Indeed, gross inflows totaled US$ 229 million (37% change), while gross outflows amounted to

US$ 1.57 billion (9% change). See Box 1 of this section to understand how these payments are broken

down and how the “Travel” and “Passenger Transport” accounts are estimated in our country20.

20 The Central Bank’s website (www.bcra.gob.ar) has been publishing a new broken-down series of the “Travel, Passenger Transport and Other Expenses Paid with Cards” account since January 2016, together with an annex broken down by sector and by main headings. To access the Statistical Annex, click here).

-849-694

-720

-1.151

-1.359-1.500

-1.250

-1.000

-750

-500

-250

0

250

500

E-13 M-13 S-13 E-14 M-14 S-14 E-15 M-15 S-15 E-16 M-16 S-16 E-17 M-17 S-17

Chart III.9 Net inflows from services

Tourism, Travels and Tickets

Business, Professional and Technical Services

Freight and Insurance

Other Services Net Inflows

Services

Million dollars

http://www.bcra.gov.ar/

http://www.bcra.gov.ar/Pdfs/PublicacionesEstadisticas/Anexo.xls


Box 1 / How much do Argentinians spend when traveling abroad? How much do foreigners spend when

visiting our country?

The “Foreign Exchange Market and Exchange Balance Report” corresponding to 2017 revealed that the

“Travel, Passenger Transport and Other Expenses Paid with Cards” account resulted in net purchases from

clients for US$ 10.7 billion. This figure is a good indicator of the amount that Argentinians spent in their

travels but it does not reflect an important component of the spending made by foreigners in our country,

mainly due to currency exchange transactions arranged in the informal market.

In fact, if we want to know the result of the “Travel and Passenger Transport” account of the country, we have

to look at the information published by the National Institute of Statistics and Censuses (INDEC) together with

the balance of payments data which, for 2017, would signal a net outflow of around US$ 7.9 billion.

Another aspect to be considered is that part of the result of the “Travel” account in the balance of payments

includes the purchase of consumer durable goods. It is estimated that 40% of Argentinians’ spending abroad in

2017, around US$ 4 billion, corresponded to goods, and especially, among them, clothes, followed by

housewares and supermarkets, while the remaining 60% was used to pay services, such as hotels, transport and

restaurants.

Which are the transactions arranged through the foreign exchange market?

Out of the US$ 12.7 billion purchased in 2017 for “Travel, Passenger Transport and Other Payments with

-1.800

-1.300

-800

-300

200

Million dollars

Chart III.10. Services, Tourism, Travels and Tickets

Tourism, Travels and Tickets - Incomes Tourism, Travels and Tickets - Outflows Tourism, Travels and Tickets - Net


Cards”, US$ 8.8 billion were transferred by institutions or other to cancel debt with international card issuers

(70% of the total), US$ 2.1 million (17% of the total) were purchased by passenger transport companies, US$

1.6 billion corresponded to tour operators (12% of the total)21 and US$ 200 million were purchased by

nonresidents in banknotes.

Regarding the sale of foreign currency for US$ 2 billion, almost 75% of transactions were arranged by

domestic credit card issuers for the collection of credits originated in foreign cards (US$ 1.5 billion), US$ 300

million corresponded to income of tour operators and US$ 200 million were related to sales of banknotes by

nonresidents in the foreign exchange market (these transactions were exclusively made in the foreign

exchange market and do not include transactions made through alternative channels).

A first important point to bear in mind is that not all funds transferred abroad to cancel debts with international

credit card issuers are related to travels since a portion corresponds to the cancellation of goods or services

purchased online by Argentinians without travelling abroad, such as entertainment, IT, subscriptions, door-to-

door purchase of goods, etc., that is to say e-commerce not related to any travel and, in this case, it is not

possible for the institution reporting the foreign exchange information to the Central Bank to make any

distinction whatsoever.

Based on information provided by credit card issuers, it is estimated that out of the total amount transferred

abroad in 2017 to cancel debts for payments with credit cards, 85% corresponded to travels abroad by

Argentinians, while the remaining 15% corresponded to goods or services received by Argentinians

without having travelled abroad (US$ 1.3 billion).

21 This amount includes accommodation, tours, admission tickets and transport tickets.

Foreign Exchange Market

Travel, Passenger Transport and Other Payments with Cards

2017. In billion dollars

8,870%

1,612%

0,21%

2,117%

Outflows: 12,7

Entities andother. Cardspayments

Travel agency

Non residents.Banknotes

Airlines andother passengercarriers

Source: BCRA

1,573%

0,317%

0,28%

0,02%

Inflows: 2,0


Likewise, it is estimated that, in 2017, Argentinians spent abroad around US$ 2 billion worth of banknotes in

foreign currency, and half this amount is estimated to have been purchased that same year (included in the

foreign exchange statistical data in private sector purchases of foreign assets).

In short, excluding the purchases made with cards not related to travels for US$ 1.3 billion and adding up an

estimated use of banknotes by residents for US$ 1 billion, it may be said that in 2017 the Argentinians made

gross purchases through the foreign exchange market for travels for around US$ 12.3 billion, which results in

a net foreign exchange deficit of the “Travel and Passenger Transport” account for US$ 10.4 billion in

2017.

How is the total result of the Travel and Passenger Transport account measured?

In order to answer this question, we have worked jointly with officials from the Ministry of Tourism and

INDEC, the institution publishing statistics related to foreign trade and balance of payments.

“Passenger Transport” (component of transport) and “Travel” are included in the services heading of the

balance of payments’ current account.

The “Passenger Transport” component measures the process of taking people, by any means of transport, from

one place inside an economic territory to another place outside this territory. This information is gathered via a

business survey and is supplemented with an estimate of the number of people transported and the price paid

for the corresponding tickets.

In turn, the “Travel” component includes the services (accommodation, food, local transport, tours) and the

goods bought by travelers in countries where they do not reside, during their stay for periods shorter than one

year.

Estimates are calculated on the basis of the number of nonresident passengers leaving the country and resident

passengers entering the country, on the basis of data from the National Immigration Office, added to the

number of nights spent in a country and the estimated average spending per person and per country based on

the International Tourism Survey.

Travel and tickets85%

E-commerce. Non travel or tickets

15%

Foreign Exchange MarketPayments abroad to credit card issuers2017: US$ 8,8 billion

Own estimate based on information provided by card issuers


It must be taken into account that, in addition to non-durable goods purchased during the stay, valuables and

consumer durable goods are also included in “Travel”, but not included in “general merchandise”. According

to data provided by credit card issuers, it is estimated that 40% of Argentinians’ expenses abroad correspond to

goods (US$ 4 billion), especially clothes, housewares and supermarkets. No estimated breakdown of goods

purchased by foreigners in Argentina is currently available.

According to an own estimate for the 2017 balance of payments, debit for “Travel” of Argentinians abroad is

expected to stand at around US$ 10.6 billion and “Passenger Transport” is estimated to stand at around US$

2.8 billion (total debit of US$ 13.4 billion).

Assuming that all foreign exchange movements are included in the balance of payments estimate, the US$ 1

billion difference in relation with foreign exchange outflows may find its explanation in the use of external

assets held (banknotes and accounts abroad), the use of which is not recorded in the foreign exchange market.

These figures mean that over 90% of total payments of Argentinians abroad for travel and passenger

transport would be reflected in the statistical data of the foreign exchange market.

With reference to expenses incurred in by nonresidents who visit Argentina, there are inflows for

approximately US$ 5 billion for “Travel” and US$ 500 million for “Passenger Transport” (a total of US$ 5.5

billion).

Here is where the highest difference lies since foreign exchange inflows related to travel accounted for only

36% of total collections of Argentinians for services provided to nonresidents.

As a result, the sum of US$ 3.5 billion not reflected in the foreign exchange statistical data correspond to

collections of residents in foreign currency or to exchange transactions for banknotes made in Argentina

through channels other than the foreign exchange market (hotels, travel agencies or other informal channels).

In this respect, the Central Bank has been adopting measures intended to provide more competition and

transparency to the foreign exchange market through the inclusion of new and varied providers in order to

facilitate access to foreign exchange, especially for foreign tourists.

In short, in order to properly analyze the result of the country’s “Travel and Passenger Transport” account, the

collections and payments made outside the foreign exchange market must also be taken into account, given

that while Argentinians are estimated to resort mainly to the foreign exchange market to cancel payments for

their travel-related services, nonresidents usually resort to alternative channels.

In 2017, out of the preliminary net amount for “Travel” and “Passenger Transport” of the balance of payments

for US$ 7.9 million, net purchases by residents for US$ 10.4 billion were recorded, while US$ 2.5 billion

corresponded to net collections for services rendered to nonresidents not settled through the foreign exchange

market.

Another point to consider is that the result of the “Travel” heading of the balance of payments comprises the

purchase of consumer durable goods, included together with nondurable goods and clothes, among other

products, in the purchases made by Argentinians abroad (which are estimated to account for US$ 4 billion in

2017), while no estimation is available of spending on goods by foreigners in Argentina.


In turn, in January, transactions related to primary income recorded a net outflow of US$ 807 million; this total

is made up by net payments for “Interest” totaling US$ 751 million, and for “Profits, Dividends and other

Income” for US$ 55 million.

Regarding payments for interest, in January, the disbursements of “Public Sector and BCRA” accounted for

almost 87% of net payments, reaching a total of US$ 654 million. This total is made up by outflows for US$

1.3 billion and collections for US$ 640 million (regarding payments, those related to services of the Discount

Bond and Bonar Bond due 22, 25 and 27 stood out, out of which the total amount of Bonar Bonds and part of

Discount Bonds where held by the BCRA in its portfolio).

In turn, the gross transfers of profits and dividends through the foreign exchange market totaled US$ 47

million (see Chart III.11), reaching the lowest level on record since December 2015 and recording an 18%

drop against January 2017. On a sector-by-sector basis, especially relevant were the outflows corresponding to

“Food, Beverages and Tobacco”, for US$ 19 million, “Insurance”, for US$ 9 million, and “Agriculture,

Livestock and Other Primary Activities”, for US$ 5 million (see Chart III.12).

2,0

-12,3

-10,4

3,5

-1,0

2,5

5,5

-13,4

-7,9

Credit Debit Net

Balance of PaymentsTravel and Passenger TransportOwn preliminary estimate for 2017. Equivalent in billion dollars

Not captured in the exchange market

Captured in the exchange market

Total

Chart III.11 Transfer of Profits and Dividends

Foodstuff, Beverages and

Tobacco 19

Insurance Companies 9

Agriculture, Cattle Raise and Other

Primary Production Activities 5 Chemical

Manufacturing, Rubber and

Plastic 4

Financial and Exchange

Institutions 2 Non-Metallic Mineral Products (Cement,

Ceramics and Others) 2

Others 50

200

400

600

800

1.000

1.200

Jan-10 Oct-10 Jul-11 Apr-12 Jan-13 Oct-13 Jul-14 Apr-15 Jan-16 Oct-16 Jul-17

Million dollars

2.125

Chart III.12 January 2018 – Total: US$ 47 millions

Total annual

4.230 4.495 253 1.344 1.316 100 2.996


III) b. Foreign Exchange Capital and Financial Account

The transactions of the foreign exchange capital and financial account on the exchange balance recorded a

positive balance of US$ 7.77 billion in January, mainly associated with the net inflows recorded by the “Public

Sector and the BCRA” for US$ 9.09 billion and by the “Financial Sector” for US$ 707 million.

These movements were partially offset by the net outflows of the “Non-Financial Private Sector” for US$ 846

million and the negative result of the “Other Net Movements” account for US$ 1.18 billion, mainly due to a

drop in domestic deposits of the non-financial private sector.

III) b.1. Non-Financial Private Sector’s Foreign Exchange Capital and Financial Account

In January, the capital and financial account of the “Non-Financial Private Sector” (SPNF) posted net outflows

for US$ 846 million, exhibiting a drop of US$ 1.14 billion against the same month of 2017 (see Chart III.13).

The main reasons behind this change were the reversals observed in the purchase and sale transactions made

by institutions22 in the securities secondary market for US$ 1.13 billion and the foreign currency local deposits

transferred abroad for US$ 791 million, as well as the increase of investments by nonresidents for US$ 217

million and of financial loans and credit lines for US$ 192 million.

Conversely, there was an increase in the purchase of external assets for US$ 1.18 billion, mainly due to a rise

in the transfers of foreign currencies abroad by residents.

22 In the foreign exchange market, transactions are recorded under the name of the institution. The net effect of these transactions has, as counterpart, non-financial private sector’s residents, or non-residents. For this reason, they are posted in the foreign exchange capital and financial account of the non-financial private sector.

Foreign Exchange Capital and Financial Account

In millons of dollars

Date nov-16 Dec-16 Jan-17 feb-17 mar-17 Apr-17 may-17 jun-17 jul-17 ago-17 sep-17 oct-17 nov-17 dic-17 ene-18

Foreign Exchange Capital and Financial Account 1.672 3.454 8.031 4.539 765 -1.050 -1.280 3.324 -316 2.137 2.599 3.331 4.750 1.174 7.773

Financial sector -1.864 681 966 773 -27 -1.817 654 -1.163 -130 -566 -291 306 -337 289 707

Non-Financial Private Sector -928 1.131 -1.984 -874 -610 -55 -780 27 -1.096 -1.804 -1 -566 -645 -1.221 -846

Public Sector and BCRA 133 685 8.184 3.250 1.458 -2.842 365 6.078 584 3.982 2.318 2.664 3.487 2.748 9.092

Other Net Movements 4.332 957 864 1.390 -56 3.664 -1.519 -1.618 326 525 574 927 2.246 -642 -1.180


Net purchases of foreign assets totaled US$ 3.12 billion in January, mainly due to net acquisitions of

banknotes for US$ 1.61 billion (see Chart III.14) and of foreign currencies for US$ 1.52 billion. It is important

to highlight that part of the abovementioned net purchases of foreign currencies correlates with the drop of

domestic deposits in savings accounts in foreign currency, basically due to the fact that mutual funds

readjusted their positions abroad.

21 13

407624

-103

89

-1.945

-3.124

-281

510

-83

1.042

-1.984

-846

January 2017 January 2018

Chart III.13 Non-Financial Private Sector’s Capital and Financial Account

Capital account Investments by non-residents

Loans and debt securities Foreign assets

Swap transfers from abroad Securities

Total

Millions of dollars

-4.000

-3.000

-2.000

-1.000

0

1.000

2.000

feb.-02 feb.-03 feb.-04 feb.-05 feb.-06 feb.-07 feb.-08 feb.-09 feb.-10 feb.-11 feb.-12 feb.-13 feb.-14 feb.-15 feb.-16 feb.-17

Chart III.14 Transactions of Banknotes in Foreign Currency by the Non-Financial Private Sector through the MULC*

Net purchases of Banknotes

Sales ofbanknotes

Purchases of Banknotes

Millons of dollars

* Excludes operations with specific destination prior to 12.17.15


In gross terms, purchases of banknotes totaled US$ 2.9 billion and went down by US$ 1.01 billion against the

figure recorded in December 2016. Nevertheless, these purchases were made by 1,050,000 clients, recording

an increase in amounts for the second consecutive month (see Chart III.15).

If the information is broken down to take into account the amount of monthly purchases by client, it is seen

that 46% of banknote purchases (around US$ 1.32 billion) were made for amounts up to US$ 10,000 per

month by client, and their share expanded by 9 percentage points against December to the detriment of bigger

players, which explains the drop in purchases against December 2017 (see Chart III.16). In addition, 97% of

the number of clients who purchased banknotes in January made transactions in the lowest segment, resulting

in an average purchase by client for the sum of US$ 1,297, whereas the remaining 3% made purchases for US$

45,473 on average. The total purchase per capita amounted to US$ 2,752.

In turn, the monthly sales of clients’ banknotes totaled US$ 1.29 billion in January, standing below the figures

of December. It was observed that sales of banknotes over US$ 2 million accounted for 32% of the total, up 1

percentage point against the previous month (see Chart III.17).

-

100.000

200.000

300.000

400.000

500.000

600.000

700.000

800.000

900.000

1.000.000

1.100.000

Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18

Chart III.15 Foreign Assets Transactions with BanknotesNumber of customers per month

Purchases of Banknotes Sales ofbanknotes


Last January 2018, natural persons went to the market to make net purchases of banknotes for a monthly total

of US$1.81 billion, while legal persons, unlike the performance observed in December 2017, made net sales of

banknotes for US$ 208 million, due to the different purposes justifying the change in portfolio of these two

segments (see Chart III.18).

Net purchases of assets for transfers abroad, known as “foreign currency transactions”, totaled US$ 1.52

billion in January (see Chart III.19), reaching the highest level of net outflow in the history of the Forex

Market. In this sense, it is important to highlight that part of these outflows were made from domestic accounts

in foreign currency (US$ 854 million), even though with a drop in domestic deposits in foreign currency.

50% 48% 50% 53% 53% 53% 55%49% 46% 45% 45%

41%

49% 47%42%

47%40%

44%47%

42% 41% 41% 38% 37%

46%

22%20%

21%19% 19% 19%

19%

19%21%

19% 20%

21%

20%19%

18%

20%

17%

18%

20%

20%18% 18%

16% 16%

18%

15%15%

16% 17% 17% 15%16%

16% 17%17%

18%18%

16%16%

16%

19%

19%

20%

20%22%

24% 27%

26%24%

26%

13%16%

12% 11%8% 7%

7%

7% 7%7%

7%6%

5%6%

5%

6%

6%

6%

5%5% 5%

6%

5%5%

5%

3% 5% 4%

3% 2%3%

4%

4%

4%3%

3%

4%

3%

3%3%

3% 4%3%

4%3%

2%5% 7% 9% 6%

10%6%

9%15%

5%

14%9%

6% 7% 8% 6%10%

14%

4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18

Chart III.16. Purchase of Banknotes by SPNF- StratifiedShare by stratum - strata defined by monthly cumulative per customer

More than US$ 5 M Between US$ 2 M and US$ 5 M Between US$ 500 K and US$ 2 M

Between US$ 50 K and US$ 500 K Between US$ 10 K and US$ 50 K Up to US$ 10 K

43%47%

41%35%

29%34% 34% 33%

24% 26%21%

13%

24%27%

20% 18% 16% 15% 18% 19% 21% 22% 21% 19%23%

14%

17%

16%

16%

15%

17% 17%15%

11%14%

15%

18%

12%

13%

15%

10% 11% 11%

13% 11%12%

14%14% 15%

14%

17%

17%

19%

19%

19%

19% 20%

17%

13%

17%18% 31%

15%

16%

17%

13% 14% 15%

17%15%

16%

17% 19% 21%18%

14%

13%

11%

14%

10%

11% 9%

12%

8%

8%9%

12%

11%

13%

9%

9% 7% 8%

10%

7%

10%

9% 11%14% 12%

8%3%

8%8%

9%

10% 11%10%

9%

11%7%

7%

13%

10%

8%

9%7% 5%

10%

8%

7%

9%10%

10%8%

4% 3% 6% 8%

18%

8% 8%13%

35%

25%30%

19%27%

21%

31%

41%45% 45%

33%40%

35%28% 26%

22% 24%

Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18

Chart III.17. Sale of Banknotes by SPNF- StratifiedShare by stratum - strata defined by monthly cumulative per customer

More than US$ 5 M Between US$ 2 M and US$ 5 M Between US$ 500 K and US$ 2 M

Between US$ 50 K and US$ 500 K Between US$ 10 K and US$ 50 K Up to US$ 10 K

1.2391.025

753953

624 636869 880 935

897812

977

1.6471.6281.465

1.2211.1731.0841.171

1.932

2.266

1.6111.4531.398

2.162

1.814

213

201

185

182

71 13

136 84121

-15

57

-14

29697

261

78

-330 -308-458

-213

25

-68 -141-29

279

-208

Dec-15 Feb-16 Apr-16 Jun-16 Ago-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17

Millions of dollars

Chart III.18. Net Purchases of Banknotes Broken Down by Natural and Legal Persons

Net purchases of banknotes by natural persons

Net purchase of banknotes by legal persons


Unlike the behavior observed in the purchase of banknotes, gross transfers abroad without reporting a specific

use for the funds and totaling US$ 2.11 billion were made by around 2,214 clients mainly belonging, as usual,

to the top segment in terms of amount, where clients with monthly purchases over US$ 2 million accounted for

87% of foreign currency total gross purchases (see Chart III.20). Likewise, in addition to the abovementioned

readjustment of positions by mutual funds, it is worth noting that part of these funds might have been used for

the payment of external obligations from the foreign accounts to which they are transferred, either for

commercial or financial purposes.

In turn, transactions related to transfers from own accounts abroad totaled US$ 591 million23, among which the

transactions made by clients who sold over US$ 2 million during the month, and which accounted for 68% of

the total, stood out. This share of the top segment in terms of amount was in line with the figures observed in

the second half of 2017.

23 It is worth stating that, according to our estimates, two thirds of the transactions made without reporting the heading, which totaled gross inflows for US$ 831 million in January, correspond to transactions from own accounts abroad.


On the other hand, there were net inflows from loans and debt securities from abroad for US$ 367 million

while settlements of domestic loans totaled around US$120 million24. On a sector-by-sector basis, there were

debt net inflows for the “Oil” sector for US$ 95 million, “Electricity” (Generation, Transport and Distribution)

and the “Automobile Industry” for US$ 73 million each.

With reference to investments by nonresidents, there were net inflows for US$ 624 million, as a result of

portfolio investments for US$ 533 million and direct investments for US$ 91 million. Consequently,

nonresidents’ investments rose by US$ 217 million in year-on-year terms, mainly due to the increase of

portfolio investments, which more than offset the drop in direct investment inflows (see Charts III.21 and

III.22).

In the case of nonresidents’ portfolio investments, it should be noted that even though a priori it is not possible

to identify the use to be given to such funds, it is possible to make a difference between funds initially kept in

foreign currency and those which, after being cleared into the country, were converted immediately into pesos.

Such distinction is instrumental to analyze the flows that may be invested in the financial market in domestic

currency.

In this sense, in January, nearly all portfolio investments by nonresidents were converted into pesos.

24 Excluding the purchase of foreign currency by clients to be delivered to the institution to pay the balance in foreign currency due to the use of cards abroad, which was calculated to be at around US$ 400 million.

131 104

139

83

151

90

1.688

314

2.109

591

Purcheses Sales

Chart III.20 Freely-available Foreign Currencies in the Foreign Exchange Market– January 2018

More than US$ 5 M

Between US$ 2 M and US$ 5 M

Between US$ 500 K and US$ 2 M

Up to US$ 500 K

6%

18%7%

14%

7%

15%

80%

53%

Purcheses Sales

Millons of dollars


In turn, the net flows deriving from direct investments by nonresidents of the Non-Financial Private Sector

(SPNF) totaled US$ 91 million, resulting from gross inflows for US$ 109 million and repatriation to foreign

countries for US$ 18 million (see Chart III.22). The main beneficiaries of fresh capital from abroad were the

sectors of “Oil” with US$ 52 million, “Chemical, Rubber and Plastic Industries” with US$ 9 million and

“Mining” with US$ 8 million.


Lastly, the foreign currency flows for the operation with financial entities’ securities in the secondary market25

posted net inflows for US$ 1.04 billion, evidencing a reversal of US$ 1.13 billion in year-on-year terms and

showing a slower pace against the inflows of December 2017 (see Chart III. 23).

III) b.2. Financial Sector’s Foreign Exchange Capital and Financial Account

In January 2018, the capital and financial transactions of the “Financial Sector” evidenced a surplus of US$

707 million, mainly accounted for by a drop in the liquid external assets of the institutions making up the

Exchange Position (PGC) for US$ 640 million and the net inflows from financial loans and debt securities for

US$ 188 million, which were partially offset by the use of funds for the primary market underwriting of

securities for US$ 120 million.

The financial institutions’ PGC stock totaled US$ 3.13 billion by the end of January 2018 (see Chart III.24)26.

Out of such total, 65% corresponded to holdings by the institutions of banknotes in foreign currency (see Chart

III.25). This stock of banknotes is held by the institutions basically to address the transactions related to serve

25 In the foreign exchange market, transactions are recorded under the name of the institution. The net effect of these transactions has, as counterpart, non-financial private sector’s residents, or non-residents. For this reason, they are posted in the foreign exchange capital and financial account of the non-financial private sector.

26 It is worth mentioning that Communication “A” 6237 became effective on May 4, 2017, stating that the institutions authorized to make foreign currency transactions may freely determine the level and use of their liquid external assets in foreign currency (PGC). However, institutions are still subject to the limits established for the Net Global Position in Foreign Currency (PGNME).


potential withdrawals of domestic deposits in foreign currency and to meet the needs of the foreign exchange

market. The stock of banknotes totaled around US$ 2.05 billion by the end of January and posted a 16% drop

against the total recorded at the end of 2017.

By the end of January, in relation to forward transactions in foreign currency in the domestic markets27, the

ensemble of institutions recorded a net long position of US$ 588 million, posting a reduction in the position

against the figure recorded by the end of December, basically due to the reversal in the “forwards” position,

which ended with a short position for US$ 515 million, while regulated markets ended with a long position for

US$ 1.1 billion, with a slight rise against December (see Charts III.26 and III.27).

If the forward stock in foreign currency is broken down by type of institution, foreign entities ended January

with a purchased stock of US$ 777 million, recording a monthly drop of US$ 597 million. In the meantime,

national institutions ended the month with a sold stock of US$ 190 million, recording a drop in their short

position for US$ 110 million.

27 This information comes from the system implemented by Communication “A” 4196 and supplementary regulations.

Chart III.24. Institutions’ Exchange Position Chart III.25. Banknotes Stock / Exchange Position Ratio

At the end of each month At the end of each month

40%37%

30%

39%37%34%33%

25%

40%37%

35%

46%

41%43%

35%

44%43%

40%44%

47%49%46%

52%

60%

47%

38%41%

47%

44%

45%43%

44%

45%

71%

77%

64%61%

56%

72%

50%53%

51%47%

43%41%

47%

52%

65%65%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 jul-17 Jan-18

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 jul-17 Jan-18

Banknotes Own currencies

Millons of dollars %


The volume traded in the forward markets28 amounted to US$ 17.72 billion in January (around US$ 744

million per day), down 13% against December 2017 but up 47% against January 2017 (see Chart III.28).

Transactions at the Rosario Futures Exchange (ROFEX) accounted for 88% of the total volume traded.

28 This information comes from the Forward Transactions Reporting Scheme (Communication “A” 4196, as amended) and the ROFEX. It includes the total volume traded in ROFEX and the transactions arranged by entities in the Electronic Over-the-Counter Market (MAE) and with Forwards.

316

1.103

-283-515

34

588

-4.000

-3.000

-2.000

-1.000

0

1.000

2.000

3.000

4.000

Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18

Gráfico III.26 Institutions’ Forwards Position

Forwards Position in Institutionalized markets

Posit ions in forwards

Forwards net posit ion

Million of dolars

777

-190

-1.400

-850

-300

250

800

1.350

Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18

Foreign entit ies Nacional entities

Gráfico III.27 Institutions’ Forwards Position by type of entityMillion of dolars

17.122

-

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18

Million of dollars

Chart III. 28. Volume traded on forwards

Rofex MAE Forwards Total Volume


III) b.3. Foreign Exchange Capital and Financial Account of the Public Sector and the BCRA

The foreign exchange capital and financial account of the Public Sector and the BCRA recorded a surplus of

US$ 9.09 billion in January (see Chart III.29), mainly accounted for by the inflows in foreign currency from

the National Treasury due to the issue of International Bonds for US$ 9 billion, LETES denominated in dollars

for US$ 1.29 billion and the settlement of financial loans and debt securities for a total of US$ 450 million.

These movements were partially offset by outflows of funds for the payment of LETES denominated in dollars

for US$ 1. 25 billion, added to residual payments for bonds subject to the sovereign debt restructuring for US$

109 million and the cancellation of financial loans with International Organizations for US$ 303 million.


133 685

8.184

3.250

1.458

-2.842

365

6.078

584

3.982

2.318 2.664

3.487 2.748

9.092

Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sept-17 Oct-17 Nov-17 Dec-17 Jan-17

Chart III.29 Foreign Exchange Capital and Financial Account of the Public Sector and the BCRA

Millions of dollars

Download - Transactions in the Foreign - Central Bank of Argentina€¦ · transactions in foreign currency with institutions belonging to the system do not imply a net demand in the whole system,

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