In June The current account of the Central Bank’s (BCRA) foreign exchange balance showed a negative balance for the first time in nine months. The relaxation of import payments was the main cause of this reversal in the result.
According to a report published this Friday by the monetary authority, in the sixth month of the year the current account showed a deficit of US$223 million. There has not been a “red” in this section since October 2023 and since Javier Milei came to power, an average surplus of more than US$2 billion had been verified.
One of the factors that contributed to the change of sign was the reduction of the balance of goodswhich showed a net foreign exchange inflow of US$795 millionmuch lower than the average of US$2.6 billion that was being observed in the first months of 2024.
Normalization in the payment of imports
In turn, this was mainly due to the normalization in the payment of purchases abroad. According to the BCRA numbers, in June 90% was paid of imports recorded by INDEC, a number that is similar to the values of March/April of last year.
It is worth remembering that in the last part of 2023, the Central Bank and the Ministry of Economy, led at that time by Miguel Pesce and Sergio Massa, respectively, coordinated the decision to postpone payment deadlines so as not to damage reserves, within the framework of an election year.
During the first months of Milei’s administration, import payments remained deeply undermined; in December only 17% was paid. However, since January the new scheme began to apply, which reduced the terms for some goods considered essential and allowed payment in four installments for the rest of the products, excluding finished cars and luxury goods.
The director of the Ledesma consultancy, Gabriel Caamaño, explained in dialogue with Ámbito that the current account deficit in June was closely tied to the seasonal energy purchases for the winter, which enters in cash, already Accumulation of import quotas carried out under the new scheme.
“Imports began to arrive at the end of January under the new scheme; the first installment arrived in February, the second in March, the third in April and the fourth in May. Since the end of that month, you already have four installments,” he added.
Other components of the current account
At the same time, the dollar income from exports was the lowest since March, which also hit the coffers of the entity currently headed by Santiago Bausili.
The favorable balance in goods was offset by a net payment of debt interest of US$423 million (two thirds made by the private sector and the remaining third for the fulfillment of obligations with international organizations, excluding the IMF), a negative balance of services for US$368 million and an expenditure of US$110 million for profit and dividend turnover.
Financial account
Besides, The financial account showed a net inflow of foreign currency of US$634 millionthe first positive balance since January. This was generated by a New contribution from the IMFwhich helped gross international reserves increase by US$358 million last month.
Bookings in the first half of 2024
In the first half of 2024, the BCRA’s reserves increased by US$5,949 million compared to December 2023. The increase was generated almost exclusively by January’s revenues, largely from the postponement of imports and aid from organizations.
Source: Ambito
