Argentines have taken dollars out of the system in February, the second month in a row.
It was around US$11 million through net purchases of cash for US$53 million, which was compensated by the repatriation of foreign investments for US$42 million. This way, the first two months of the year show a purchase of dollars for saving purposes –or capital flight according to local market slang– of US$ 93 million, a third of the amount gone in the same period in 2022. Apparently, the arm-wrestling between those betting on the carry trade and those who prefer buying dollars is being won by the latter.
This was confirmed by February data from the Foreign Exchange Balance of the Central Bank (BCRA) showing the “net formation of foreign assets by the non-financial private sector” (FAE) resulted in net outflows for US$11 million. The cash amassing is explained by individuals’ net purchases for US$130 million, which were partially offset by US$77 million through net sales by legal entities and others.
A total of 680,000 individuals bought cash for US$133 million, while another 17,000 made sales for US$3 million. This way, per capita purchases and sales happen at 196 and 195 dollars, respectively.
On the other hand, there were also net transfers received by individuals’ foreign accounts for a total of US$42 million, which tempered the net flight of capitals in February. The “Real Sector excluding Oilseeds and Cereals” received net transfers for US$ 39 million, the “Institutional Investments and Others” sector received US$12 million, and the “Oilseeds and Cereals Sector” got US$11 million. These incomes were partially compensated by net transfers to foreign accounts by natural persons for US$20 million.
Actually, natural persons not only purchased currency for savings purposes (US$130 million through cash purchases) but also to cover credit card purchases from foreign providers for a net US$332 million, so the total net purchased amount was US$503 million.
With regard to the financial system, the operations of the sector’s foreign exchange financial account resulted in a US$69 million superavit, explained by the US$114 million drop in liquid external shares.
That decline was in part balanced out by outgoings for financial loans and credit lines to the tune of US$45 million. February’s exchange balance shows that the entities ended the month with stock of US$5.74 billion dollars, a 2% drop compared with the previous month.
The drop was down to a US$155 million in cash holdings, which were partially compensated for by the US$41 million currency increase. That way, foreign currency cash holdings totalled US$3.52 billion by the end of February, stock which represents 61% of the total, and which is reserved by the entities in order to attend movements of local foreign currency deposits and the needs of the exchange market.
With regard to the positions of the financial sector in the futures market, the entities closed the month with a foreign currency sales position of US$833 million, which resulted in a reduction of around US$314 million of their sales position compared with January’s close.
Regarding financial sector positions in the futures market, companies closed the month with sales of foreign currency for US$ 883 million, which meant a US$314 million reduction in comparison with January’s closing.
Throughout February, banks purchased US$68 million from “Forwards” clients and another US$246 million in institutional markets. Foreign capital companies ended February with net sales of US$ 411 million, a US$ 260 million from the previous month. In turn, local companies bought US$54 million and reduced their January net sales.