Due to the stability of exchange rates, currency leakage was reduced by 40% in October

In the month of October, the formation of external badets – also called capital flight – fell to $ 1,163 million, or 41.2% less than in September and 75% less than the peak flight peak recorded in May. this year ($ 4.616 million). In the year-over-year comparison, it also recorded a 40.4% increase thanks to the stability of the exchange rate recorded during the month, the previous dollarization of the investment portfolios and interest rates. high interest resulting from the monetary program of Guido Sandleris.

These three reasons also reflected the fact that last month net dollar demand for hoarding and overseas travel fell to $ 632 million, according to the Foreign Exchange Report released Monday by the Central Bank. That is, the purchase of US banknotes by registered human persons in October is the lowest value since April 2016.

This demand was partially offset by the net sale of US notes by institutional investors and real sector companies ($ 156 million), which was not the case since April, when exchange rate fluctuations were disparate. Residents as businesses had a net buying position in dollars.

Thus, the currency market data confirm the diagnosis of Guido Sandleris' team that exchange rate stability and the high interest rate have allowed companies to use the dollars they had acquired during the months of July and today. August to finance, a trend that will have been projected the first three weeks of November.

The publication of the report coincided with two wheels of high exchange rate volatility. Since last Thursday, the dollar has jumped 6.8% ($ 2.54) and has remained at cents of 40 dollars, moving away from the floor of the waterline whose exchange rate n & # 39; 39 has not disappeared since the implementation of the new Monetary Aggregate Control Policy.

Sources of the Central Bank have estimated that it was a multi-causal phenomenon, but that its effect was limited because fluctuations in the exchange rate of the last two days did not occur. were not visible at the moment on the money market ", all the deadlines of the day of Leliq without modification of the rate of cut".

In fact, the latest biweekly report indicated that the monetary authority was able to achieve the goal of zero growth of the monetary base for the second consecutive month. "We will do everything we can to continue to absorb excess cash," they told the LPO.

The Central Bank's sources badured LPO that exchange rate volatility did not affect the monetary aggregates target and that they "will do whatever is necessary to continue to absorb excess liquidity".

Interest rates above the annual par value of 70% for October liquidity bills (Leliq) resulted in fixed term rates at 30 days of about 45% of the annual nominal value, an amount slightly above 3% of the monthly cash. In this sense, the stability of the exchange rate encouraged the repatriation of capital from the non-financial private sector.

In this regard, the Foreign Exchange Report reports that: "Transactions involving transfers of funds from our own accounts abroad amounted to US $ 845 million and were also centralized at customers who sold more than 2 million US dollars. US $ million during the month (or 74%) In addition to these flows, it is estimated that two-thirds of the transactions carried out without declaring a concept, which do not appear in the result of this account, may also correspond to repatriations of residents ( approximately $ 600 million). "

It should be remembered that the currency's surge these two days weighed on the 60-day fixed-rate yield at market peso interest rates.