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only 24% of imports were canceled in January

The government of Javier Milei faces a complicated scenario even on the fronts of the economy in which Excel allows it to show favorable numbers at a beginning of management marked by adjustment, the acceleration of inflation, the deterioration of purchasing power and the acute recession. This is the case of the front of the foreign exchange. Despite the recovery of international reserves, City analysts warn that the outlook for dollar cash is far from showing comfort in the face of the lifting of the stocks exchange rate, one of the central objectives outlined by the President.

A sample of this appears in the official data for January. The currencies that the Central Bank bought in the single free exchange market (MULC) last month (US$3,272 million, according to the entity’s balance sheet) were equivalent to the import payments that it made the monetary authority. As a result of the strict rationing of access to the official dollar to cancel new purchases abroad applied on December 13 through a phased scheme, in search of creating a bridge to the gross harvest, in January the payment of US$3,304 million was deferred .

According to the BCRA’s Evolution of the Foreign Exchange Market and Exchange Balance report, last month Only US$1,068 million were paid for imports, 74% less than in January 2023. Beyond the fact that part of the fall responds to the lower income of merchandise as a result of the recession and the reduction of the exchange gap, the truth is that Only 24% of the US$4,372 million of FOB imports was paid (that is, the value at the point of shipment) that were made in the same period, according to data from the monetary authority itself. The difference is a little wider if the US$4,601 million reported by INDEC in CIF imports are taken (a value that includes freight and insurance costs).

This means that, if these payments had not been stepped on, the year would have started without net foreign currency purchases by the BCRA. And the gross reserves, which increased by US$4,569 million, would have barely increased by US$1,265 million, a figure that would be explained in its entirety by the foreign currency sent by the International Monetary Fund (IMF) after the agreement for the seventh review of the Extended Facilities program and that will be used in April to pay the organization itself one of the maturities corresponding to the debt that Mauricio Macri took on in 2018.

Currencies: challenging scenario for the rest of the year

However, after the December megadevaluation, the recovery of reserves happened and allowed the Luis Caputo – Santiago Bausili tandem to go through the months of the low season of agricultural currency settlement. From a critical starting point on December 10 (in the private sector, they estimated negative net reserves of just over US$10 billion), some air was gained but the balance is still negative at around US$5. 000 million.

A report of the Capital Foundation analyzed the process and projected a challenging scenario in terms of currencies for the remainder of the year. According to the firm founded by Martín Redrado and today coordinated by Carlos Pérez, former director of the Central, since the beginning of the current administration “international reserves have increased by US$6,268 million (US$2,700 million until December 31). December and the rest so far in 2024)”, although he stated that this rebound must be qualified by the “reduced import payment context”: in that period there was “US$5,720 million difference compared to effective imports ”.

In any case, what works in your favor now will begin to work against you as the months go by. The consultant LCG He put it this way: “Access to the MULC for most importers is under a schedule depending on the activity they carry out, which began in December, so it would begin to gradually reverse in February with the release of foreign currency for imports for some sectors.” As projected by the Capital Foundation, In April, effective imports and their payments would be equal, and towards the last quarter of the year the payments would be higher. Although important, it will not be the only factor that puts tension on the currency front for the remainder of the year.

A 2024 with fewer agrodollars and payments to the IMF and bondholders

In the agreement reached with the IMF Last month, the Government committed to accumulating at least US$10 billion in net reserves between December 10, 2023 and the end of 2024. As various voices in the City suggest, the foundation maintains that this is “an achievable objective but one that does not look so simple.” What are the prospects?

According to the Capital Foundation, a sensitive element is the cut in the dollar income projections of the agro-export complex for this year. As a result of the reduction in international prices of corn, soybeans and their derivatives (due to greater supply from the United States, Argentina, Russia and Ukraine, and lower demand from China) and the deterioration of crops as a result of the heat wave that the country went through since mid-January, the forecast for agricultural exports decreases by US$5,980 million compared to initial estimates. The consulting firm now expects US$31,095 million to come in, an extra US$9,400 million compared to a 2023 marked by drought but below the figures of 2021 and 2022.


With this table, the report suggests that total exports would reach US$78,125 million (+17% year-on-year) in 2024 and imports would reach US$59,100 million (they would fall 19.8% year-on-year in the context of a recession economic). “Thus, we estimate a trade surplus of around US$19,025 million,” said the Capital Foundation, although it clarified that how much of this is capitalized by the BCRA will largely depend on when the Government decides to end the scheme known as “dollar blend” or “export dollar”, which means that 20% of exports are settled in cash with settlement (CCL) and do not go to international reserves.

It happens that this year “the first commercial debt payments “inherited” for about US$2.4 billion, considering the flow of BOPREAL awarded and access for MSMEs with debts of up to US$500,000. To this we must add, according to the firm created by Redrado, an expense for payments of private debt for about US$8.5 billion, an outflow of US$773 million in the formation of foreign assets and a deficit in the services account of US$900 million.

Regarding public sector debt, there are maturities of US$4,357 million with private creditors and should be done net payments to the IMF for US$828 million. Regarding this last point, the Government is negotiating a new program with the Fund in search of access to fresh funds (new debt) from the organization. Although, after her recent visit to the country, the IMF’s number two, Gita Gopinath, said that access to greater financing was not yet on the table for discussion. Furthermore, it will depend on the decision of the United States and other countries with key seats on the Board.

With this panorama, LCG maintained that the Government is close to meeting the goal of accumulating net reserves of US$6,000 million since “US$200 million remain to reach the objective.” But he considered that accumulating the US$7.6 billion scheduled for September of this year “seems difficult” for payments to bondholders in July (US$2.9 billion) and net maturities with the IMF. In addition, he pointed out that “it will be necessary to see if the recessionary effect and the rise in the exchange rate will be enough to moderate the demand for dollars for imports as payments begin to be regularized.”

Accumulation of reserves: the end of the blend dollar will be key

That is why One of the keys to the accumulation of reserves will be the moment in which the export dollar is dismantled 80-20, which until now served to sustain the liquidation and contain the exchange gap (by injecting supply into the CCL). In general, the Fund rejects differential exchange rate schemes. In this particular case, The latest Staff Report indicated that the Government plans to eliminate it by June of this year.


According to the Capital Foundation, to meet the reserves goal it may be necessary to eliminate it before the start of the heavy harvest. In a hypothetical scenario in which it was maintained until the end of the year, the firm estimated that there would be some US$15.6 billion of exports that would enter via CCL and would not go through the MULC. On the other hand, if it were removed by April, it would prevent that from happening with about US$13 billion. “Thus, the gross reserves would increase by US$9,000 million in the year and the net reserves would be -713 million”, which would allow us to meet “the reserve accumulation goal with the IMF (which also contemplates the accumulated foreign exchange). during the month of December 2023).

But the moment to apply the measure is not a simple decision. Eliminating the blend dollar would imply a drop in the effective exchange rate for exporters (if today’s values ​​are taken, from about $895 to $840) unless it is accompanied by a devaluation jump or a considerable acceleration of the crawling peg, which for now The Government seeks to keep away from market expectations. “In addition, it could generate a widening of the exchange gap, by eliminating the extra that is settled monthly in this market,” added the foundation report.

And he concluded: “The dollar cash is not large and to advance in the elimination of restrictions on the exchange market, which the authorities continue to mention, a greater accumulation of foreign currency is necessary. To do this, it is necessary for the economic program to generate enough confidence to attract investments and/or fresh funds from international organizations, an issue that is not yet evident.”


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