Weekly

Weekly Reports

Dollar purchases increased (sooner than expected) in the electoral year

First week
of June 2011
The private sector’s net purchases of foreign assets did not stop and reached U$S 7.5 billion in the first five months of the year This figure is greater than the US$ 7.4 billion accumulated in the 10 months before the 2007 Presidential elections. In the first five months of 2007 capital flight was only US$ 133 mi...

“Free and available” international reserves will run out at the end of the year

Fifth week
of May 2011
By the end of the year we expect international reserves to be equal to the monetary base, marking the end of the “free and available” reserves used by the government to pay debt. We estimate the financial gap next year will be US$ 9 billion; whether more reserves will be used (though no longer “free and available”...

Economic activity continued to expand in March

Fourth week
of May 2011
According to EMAE-INDEC activity grew 0.5% relative to last month, in line with growth in the first two months (0.5%), although clearly below the last quarter (1.1%) of 2010, according to our estimates growth was even higher. Activity grew 7.8% y/y according to EMAE-INDEC and 7.6% according to our estimates, the v...

The spread between the official dollar Exchange rate and the parallel market is a record high: 5.9%

First week
of May 2011
The official Central Bank exchange rate is AR$ 4.08 while the parallel market trades at AR$ 4.33 So far this year the official exchange rate rose 10 cents, or 2.6%. The informal exchange rate, however, rose 20 cents, or 4.8% relative to last December.

The trade surplus in March remained stable reaching US$667 million

Fourth week
of April 2011
The trade surplus in March was in line with the values of January and February and, although it duplicated relative to year ago, it was because exports one year ago were affected by the harbor-worker’s strike and the conflict with China over soybean oil. Imports reached their second greatest historical record and ...

The Central Bank’s debt is equivalent to half the country’s international reserves

Third week
of April 2011
The Lebac and Nobac stock totals AR$ 82 billion and reverse repos reached AR$ 15 billion. The AR$ 97 billion in Central Bank’s non-monetary liabilities is equal to 47% of international reserves. En los primeros tres meses del año, el Banco Central emitió AR$12,629 millones para comprar dólares y evitar que ca...

In the last five years the increase in private and public consumption reduced the investment rate and the external surplus

Second week
of April 2011
Between 2006 and 2010 private and public savings fell 5.5 percentage points of GDP, affecting the investment rate and the trade surplus, which fell equally Several factors encourage consumption instead of savings: inflation, negative real interest rates, private loans aimed to consumption, new social policies, and...

The (lax) monetary target was met in the first quarter

First week
of April 2011
Total M2 grew 32.1% y/y on average over the past 30 days, within the programs target for the first quarter Private M2 increased 36.5% per annum, above the program’s 34.4% upper limit for the last quarter of the year The Central Bank can say it met the monetary target for the first quarter: the monetary aggreg...