Private dollar demand collapsed in the month after the election who saw the ruling party as victorious, as official sources had announced days ago, but the stock market balance closed in the red againlike in 9 of the last 12 months, mainly affected by the large deficit in the services balance.
The X-ray picture of what happened to the dollar world in November comes from today’s release of the Central Bank’s Foreign Exchange Balance Sheet (BCRA).
This results from this the net purchase of banknotes and the transfer of currency excluding specific private sector purposes, which had just reached “peaks” of $6,577 million in September and $5,434 million in October, fell to $1,119 million in November (i.e. down 79.43%).a figure very similar to the estimate made by BCRA Vice President Vladimir Werning two weeks ago when he appeared at a seminar abroad and wanted to convey calm on the matter.
This result is explained primarily by the Net purchases of banknotes with no specified uses totaling $871 million and foreign currency transfers without a specific purpose amounting to $248 million,” says the official report, which also shows this 1.1 million “people” made gross purchases worth $1,597 million this month (in October they had asked for $4,669 million), while another 692,000 grossed $509 million.
Werning had explained in the above presentation that the fall “Reflects an abrupt shift in saver preferences and risk perception in the country” This represents a contrast to previous distrust. “The history of exchange rate adjustments in election years weighed on confidence: fear of the past, rather than economic imbalance, drove demand for dollars,” he said at the time, before weighing in Dollarization before the election was $35 billion. Amount that represents more than 50% of the total means of payment (private M2).
The report also reports a new negative balance in the checking account, This suggests that the local economy is spending more dollars than it is generating.
In November, this red amount was $1,163 million and is “explained primarily by net expenditures from the ‘Primary Income’ and ‘Services’ accounts of $1,131 million and $559 million, respectively, partially offset by net receipts from ‘Goods’ of $535 million.” Looking at the last twelve months, the deficit in this account is $2,683 million.
In the services balance, a good part of the deficit is caused by the tourism deficit. In fact, the report estimates that gross spending on the consumption of goods and services paid for with cards, travel and tickets (excluding digital services and goods sent via postal services) amounted to $647 million in November, “explained by gross spending related to card spending for travel, estimated at $472 million, $101 million related to passenger transportation services, and $74 million related to foreign transfers of.” tourist operators”.
Although the numbers are negative, indicate an improvement compared to the overall deficit in this item of $1,008 million recorded in October, almost 63% of which was attributed to tourism spending outside the country.
The BCRA appreciates the following in this regard 70% of all these expenses “are paid directly by customers using funds in foreign currency.”
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