The “Services” account of the Exchange Balance of the Central Bank (BCRA) registered a deficit of US$506 million in April, the lowest in the last five months, and 42% less than a year ago and 38% less than in Last March. The result for April is mainly explained by the net expenses related to “Travel, tickets and other card payments” and to “Freight and Insurance” for US$439 million and US$265 million, respectively.
These outflows were partially offset by net income from “Business, professional and technical services” and from “Other Services” of US$183 million and US$15 million, respectively. Thus, the accumulated figure for the first four-month period of the year shows a deficit in Services of the order of US$2,750 million, which implies a fall of 14% in relation to the same period last year.
Item questioned
In relation to the disputed “Freight and Insurance” item, in April gross expenses for both concepts totaled US$293 million, which implies a 29% monthly drop and a 42% year-on-year drop. For the BCRA, the fall “obeyed the provisions of Communication “A” 7746 (of April 20) where new measures were reported to finance the payment of the import of professional services and freight between related companies.
Apparently the “pressure” of the IMF technicians had an effect, since they had been claiming for the excessive amounts associated with freight and insurance expenses, in relation to international standards.
The BCRA also highlights the increase in gross income from travel and tickets that totaled US$149 million, and almost tripled those of April 2022. It also points out that said increase is explained “within the framework of Communication “A” 7630 ( of November 3, 2022) that in order to boost foreign currency income from receptive tourism, it resolved to exclude from the requirement of settlement in the exchange market the income of funds with non-resident cards, charges for tourist services contracted by non-residents residents and for non-resident passenger transportation service charges.
It is worth remembering that this allows recipients to apply a higher exchange rate to card purchases in the country by non-resident tourists.
Trips
But on the other hand, gross travel expenses totaled US$588 million, which implies a 6% monthly drop and an 8% year-on-year increase. It should be remembered that under the “Travel, tickets and other card payments” account, wire transfers abroad are channeled to cancel balances with international card issuing companies, including both consumptions made for trips abroad and non-refundable purchases. face-to-face with foreign suppliers.
As regards primary income operations, they represented a net outflow of US$310 million in April, mainly due to net “Interest” payments of US$297 million. Within gross interest payments, US$162 million were made by the “Government and BCRA”, of which US$139 million correspond to interest payments with international organizations (excluding the IMF), while the private sector totaled payments for US$178 million.
It should be noted that, as of April 20, through Communication “A” 7746, prior authorization was provided for the payment of interest on debt between related companies. In the event that the creditor is a counterparty linked to the debtor, prior authorization will be required until the end of the year to access the exchange market to pay interest services on commercial debts for imports of goods and services and/or financial loans with the outside.
Likewise, gross outflows of profits, dividends and other income abroad for US$16 million were recorded. Lastly, secondary income operations showed a deficit result of US$15 million.
Source: Ambito
