In October, in the middle of the electoral campaign, the boom in dollar purchases by people and companies through financial operations continued: US$6,331 million. Subtracting sales, there was a net expense of US$5,434 million. In September they totaled US$6,577 million.
Of that total, 1.6 million people made gross purchases of banknotes for US$ 4,669 million and 784,000 made gross sales for US$ 473 million according to figures from the Central Bank (BCRA).
So, In the first 10 months of the year, purchases by the non-financial private sector totaled US$36,746 million. And sales of dollars by individuals and companies totaled US$ 7,348 million, leaving a “deficit” of US$ 29,398 million according to the figures from the Central Bank’s Exchange Balance. This is the highest value of “foreign asset formation” since the beginning of the 2003 series.
A good part of the purchase of dollars did not remain in the financial system because in October “private sector deposits increased by US$ 1,160 million, ending the month at US$ 35,105 million,” according to the BCRA. And international reserves decreased by US$ 992 million compared to the end of September.
“This dynamic was fundamentally explained by the dollar sales operations carried out by the National Treasury in the market in a month of financial volatility.. This resulted in a drop in their foreign currency deposits at the BCRA. The increase in current account deposits in foreign currency of financial entities at the BCRA operated in the opposite direction,” the report states.
For its part, unlike September, The current account of the exchange balance registered a deficit of US$ 2,599 million in October.
Foreign trade left a negative balance of US$677 million. Import payments totaled US$6,067 million, partially offset by export charges of US$5,389 million.
This deficit is explained by the strong advances of income from export collections in September to the detriment of the month of October due to the reduction and/or elimination of tariffs on foreign sales.
But, In 10 months the current account balance is only US$505 million.
To the goods deficit, “red” was added in the services account with net expenditures of US$ 1,008 million. Interest also left a negative balance of US$ 916 million: of that total, US$ 718 million were made by the “General Government and BCRA” and US$ 189 million by the private sector.
In 10 months the interest account shows a net outflow of US$ 8,084 million.
Net expenses for trips and tickets reached US$ 793 million, accumulating in 10 months a negative balance of US$ 8,780 million, the highest value since 2017.
The report highlights that “the financial debt movements of the non-financial private sector, which includes loans from abroad, debt securities, loans from international organizations and local financial loans, resulted in net income of US$ 563 million in October (where the net income of the “Energy” sector stood out for about US$ 315 million). This total was explained by net income from financial debts abroad, securities in foreign currency and loans with international organizations for US$ 590 million.”
For their part, direct investments by non-residents in the non-financial private sector registered net income through the exchange market for just US$ 124 million in the month of October, while portfolio investments by non-residents registered net income for US$ 1,924 million.