BCRA Accelerated Reserve Purchases Following IMF Review

The Central Bank of the Argentine Republic (BCRA) purchased USD 369 million during the week following the close of the International Monetary Fund (IMF) mission, which reviewed the third revision of the current agreement. The entity acquired foreign currency across all five trading sessions and stepped up its intervention pace in the foreign exchange market.

Purchases totaled USD 11 million on Monday, USD 70 million on Tuesday, USD 160 million on Wednesday, USD 93 million on Thursday, and USD 35 million on Friday. The USD 1 billion disbursement outlined in the program still depends on the Fund's determination regarding approval of the review.

The weekly result came close to the total accumulated during September, when the BCRA had purchased USD 473 million. The monthly figure fell short of August's USD 768 million, as well as the records from July, June, May, April, March, February, and January, which reached USD 2.162 billion, USD 1.418 billion, USD 2.596 billion, USD 2.769 billion, USD 1.671 billion, USD 1.557 billion, and USD 1.158 billion, respectively.

According to official explanation, the lower availability of dollars during September was linked to a seasonal decline in agricultural export settlements. For the coming months, the Government expects a recovery in foreign currency inflows stemming from the wheat harvest, energy exports, Vaca Muerta, and mining activity.

The BCRA noted that the entity will purchase foreign currency only when excess supply exists in the market and that such operations will not aim to modify the dollar price. Within this framework, reserve accumulation appears associated with foreign currency availability in the market.

Economy Minister Luis Caputo stated that the BCRA accumulated USD 14.350 billion through September and presented a projection of USD 19.438 billion for December. He also noted that the monetary authority could exceed USD 20 billion in purchases before the elections, as a buffer against potential currency pressure. The target exceeds scenarios initially considered, of USD 10 billion and USD 17 billion.