Download FOREIGN TRADE AND THE BALANCE OF PAYMENTS I. Balance

FOREIGN TRADE AND THE BALANCE OF
PAYMENTS
I. Balance of Payments1
Balance of payments in the third quarter of 1997
During the third quarter Argentine foreign trade benefited from strong economic
growth and ample availability of international financing, conditions similar to those in force
during the previous quarters of the year. Although the countries in South-East Asia had
already begun to experience a severe exchange and stock-market crisis, its effects were to reach
this region only in the fourth quarter.
In the third quarter of 1997, the balance of payments current account recorded a
US$2,694 million deficit, approximately US$1,778 million more than during the same quarter
of 1996. Most of this increase (80%) resulted from the merchandise account. While exports
of goods fell slightly (0.5%) compared to the levels reached in the third quarter of last year,
imports of goods rose by 23%. In the first case this was mainly due to the decline of 28% in
primary products and 21% in fuel and energy, which were not fully offset by increases of 22%
in MIO (manufactures of industrial origin) and 9% in MAI (manufactures of agricultural
origin). The rise in imports is a reflection of increased levels of economic activity and the
high income elasticity of imports, with a marked increase in the purchase of capital goods.
The capital and financial account recorded a US$2,277 million surplus in the third
quarter of 1997, so that international reserves for a total of US$ 417 million were required to
finance the current account deficit. Of the total capital and financial account surplus, 68% was
accounted for by transactions by the non-financial private sector (including outflows net of
other capital movements), with a lower participation being recorded by the BCRA in external
financing, the public non-financial sector and the BCRA itself.
Transactions by the non-financial public sector have included the exchange and/or
repurchase of bonds issued in the context of the 1992 Financing Program for a total of
US$ 2,994 million residual par value through the placing of a 30-year Global Bond for an
amount of US$ 2,250 million.
The rest of the financial sector (excluding the BCRA) brought in funds totaling US$
455 million. The increase in financial liabilities has been due to the increased taking of
deposits from non-residents and the rise in sundry obligations, partly offsetting the increase in
other credits from security swap transactions. Income from deposit transactions was partially
offset by the increase that took place in assets. The categories with the greatest growth were
loans and other receivables and portfolio investments in foreign securities. Liquid funds also
increased as a result of the larger volume of liquidity requirement deposited in New York, a
consequence of the higher level of deposits and the increase of one point in the liquidity
requirement rate. Fluid access to international capital markets by the non-financial private
sector enabled some of the needs arising from the increase in economic activity to be met
from external resources. In net terms the non-financial private sector placed bonds and
securities for US$ 1,424 million and recorded foreign direct investment (FDI) for US$ 2,211
million. Other capital movements (attributed basically to the non-financial private sector)
totaled a net outflow of US$ 2.1billion.
The FDI estimated for the quarter has basically been a consequence of the sale of
corporate shareholdings, in particularly by banks, to direct non-resident investors. These
transactions amounted to US$ 1,817 million, accounting for 81% of the total of US$ 2,251
million in FDI estimated for the quarter, an unprecedented quarterly inflow.
Total balance of payment financing requirements for the third quarter were higher than
those of previous quarters. This has mainly been because of the increased current account
deficit, the debt exchange and repurchase transaction for US$ 2,250 million2 and the creation
of external assets from inflows recorded by the non-financial private sector in the form of
direct investment from changing hands3 .
Financing needs were covered by long-term
placements (70% by the public sector and 30% by the private sector) and by direct
investments.
The balance of payments in the first three quarters of 1997
The result of Argentina’s balance of payment went from a surplus of US$ 1,634 million
during the first nine months of 1996 to a deficit of US$ 1,573 million in the same period of
this year, reflecting the difference in the rate of growth of exports and imports. This behavior
by the foreign trade sector, and to a lesser extent the increase in net outflows for real services,
interest and dividends, explain the estimated increase in the current account deficit from US$
2,196 million in 1996 to US$ 6,514 million in the current year.
In the first nine months of the year the capital and financial account surplus was higher
by US$ 4,055 million that that estimated for the same period of the previous year, keeping pace
with the current account deficit and in particular with the financing needs of the non-financial
private sector generated by the trade deficit. It is interesting to note in the YoY comparison
of the first nine months of the year that there has been a lower net inflow of funds from the
non-financial public sector and a significant increase by the non-financial private sector, which
went from a net outflow of US$ 1,757 million in 1996 to a net inflow of US$ 5,672 million
during 1997, consistent with the reduction in sovereign risk during the period.
II. Current Account
Merchandise Trade
During the first nine months of 1997, the value of trade in merchandise, both imports
and exports, increased compared to the same period of 1996, although at a different rate.
While exports of goods increased 6.9% (totaling US$ 19,001 million), imports increased 27.4%
(totaling US$ 20,574 million). Because of this difference in the rate of growth, Argentina’s
trade balance has gone from a surplus of US$ 1,634 million during the first nine months of
1996 to a deficit of US$ 1,573 million in the same period of this latest year.
Exports
Exports of goods recorded a sharp rise in the rate of growth in the first two months of
the year and in April, while in March and May growth was only moderate. In June, July and
August the YoY growth rates were negative, followed by an increase of 8.6% in September.
An analysis of the performance of exports by type of product in the first nine months
of 1997 compared to the same period of 1996 shows an irregular pattern: while exports of
primary products and fuels and energy fell by US$ 82.1 million (-1.7%) and US$ 12 million
(-0.6%) respectively, manufactures of agricultural origin and manufactures of industrial origin
increased by US$ 548.2 million (8.9%) and US$ 765.3 million (16.4%) respectively.
The decline recorded by primary products has mainly been due to the behavior of the
oilseed and fruit and cotton fiber accounts. In the case of oilseed and fruit the drop of
US$ 603.1 million (67.8%) is mainly due to the reduction in the value of soybean exports
(-75.7%) sunflower (-81.2%) and peanuts (-25.8%) caused by the lower available exportable
balances, mainly because of lower yields and to a lesser extent because of the use of part of the
harvest for industrial purposes. Exports of cotton fiber fell by US$ 177.3 million, 43.6% less
than in the same period of 1996. This drop has been due to the drought that affected the
cotton-growing region early in the year which caused both a reduction in the volume harvested
and the quality of the resulting fiber, so that the prices received were lower than those of the
previous year.
Cereals have shown the largest increase among primary products, with a rise of
US$ 563.3 million (28.3%). The main factor behind this improvement has been the increase in
the volume of wheat exported following the poor harvest in the previous period. After the
high prices recorded during 1996 the prices of all cereals fell during 1997.
Within the MAO category fats and oils have led growth, with export sales US$ 294.5
million higher than in the same period of 1996, an increase of 21.3%. This has been a
consequence of greater volumes of production following the increase in installed capacity by
the vegetable oil industry, as prices have remained virtually unchanged.
The category
recording the second-highest rate of growth within the MAO classification has been food
industry waste and residues, consisting mainly of soybean and sunflower by-products. The
export value of sunflower by-products increased by 9.2% compared to 1996 following an
increase in volume that has more than offset the fall in international price.
Soybean
by-products were up 18.4% in value during the period as a result of increases in exportable
balances and in the price obtained.
Exports of skins and leather were 11.3% or US$ 72.5 million higher than in the
previous period, led by exports of tanned leather. Meat exports fell 8.1%, being US$ 64.8
million lower than in 1996 as a result of the drop in beef consumption in Europe following the
outbreak of “mad cow disease”, as well as from failure to fulfill the quota assigned to
Argentina for meat exports (as there was no demand at the prices offered) and from high
domestic prices that discouraged export.
Certain other relatively less important manufactures of agricultural origin have
nevertheless shown dynamic growth. Such is the case of mill products (35.2%), tanning and
dyeing extracts (19.1%) and tea, yerba mate and spices, etc. (14.6%).
Manufactures of industrial origin grew by 16.4% during the first nine months of 1997
compared to the same period of the previous year. All the main categories making up the
MIO segment have recorded increases in the period. Transport material has led the way with
increased exports for US$ 541.2 million (46.6%) as a result of the impact of the special regime
for the auto industry that has been agreed with Brazil. The machinery and apparatus and
electrical material segment increased its exports by US$ 99.9 million (14.2%), driven to a large
extent by the increased sale of auto engines, which are also included in the special regime
agreed with Brazil. Chemical products and related products recorded an export increase of
US$ 80 million (11.3%), while exports of base metals and their manufactures grew by 5.7%,
US$ 48 million up on the same period of the previous year .
Within the MIO category there were two sectors of note among those recording lower
exports: leather manufactures and leather-work, with sales US$31.8 lower, and plastics, with
exports US$ 20.3 million or 8.1% lower.
Exports of fuel recorded almost no change in the total value of sales, although their
structure has altered. There were reductions in the sale of crude oil and lubricating oil that have
been offset by increases in gasoline and gas and other gaseous hydrocarbons. The drop in
crude has mainly been due to the fall in international prices, while the increased exports of
gasoline have been influenced by the lifting of the restrictions that existed in Brazil on the
import of such products.
The structure of Argentina’s exports during the first nine months of 1997 underwent
certain changes compared to the same period of 1996. Exports of primary products declined
from 27% to 24.9%, and fuels dropped from 12% to 11.2%, exports of MAO increased their
share from 34.7% to 35.4% and exports of MIO rose from 26.2% to 28.5%.
An analysis of exports by regional destination during the period under review shows
that three of the main trading blocks absorbed 58.8% of total Argentine exports: 34.5% of
exports went to Mercosur, 15.5% to the European Union and 8.8% to NAFTA.
Exports to Mercosur were led by fuels, transport material, cereals, and machines and
devices. These four items accounted for 57.4% of total Argentine exports to that region.
Mercosur absorbed 93.2% of total Argentine exports of transport material, 67.5% of machines
and devices, 47.4% of exports of fuel and energy and 25.2% of cereal exports.
Exports to the European Union totaled US$ 2,947.9 million in the first nine months of
1997. MAO exports had the greatest relative share, 57.9% of the total, particularly sales of
food industry residues and waste that accounted for 30.5% of total exports to the European
Union and 46% of total Argentine exports in that category. Another important category is
meat, for which the European Union purchased 50% of Argentina’s total exports. The EU
takes a significant 25.4% of Argentina’s total exports of manufactured products of agricultural
origin. Primary Products were the second most important category, with 31% of all exports
being shipped to the EU, mainly fresh fruit (the EU bought 60.4% of total Argentine export
sales). Led by base metals and their manufactures, MIO accounted for 11% of exports to the
EU.
In the first nine months of 1997, exports to NAFTA totaled US$1,674.5 million.
Primary product exports totaled US$ 248.9 million. MAO exports totaled US$ 648.2 million,
making them the principal export category to this destination. Principal exports in this category
include furs and leather, meat and processed legumes, vegetables and fruits. MIO exports to
NAFTA totaled US$ 474.4 million, led by base metals and their manufactures. Exports of
Fuel and Energy totaled US$ 303 million.
Imports4
In the first nine months of 1997, FOB imports totaled US$ 20,574.2 million, up 27.4%
from the same period of 1996. Analysis of monthly data shows a high increase rate in every
month.
The YoY comparison for the nine months shows a rise in CIF terms of all categories
of goods except fuel, which fell 12.5% and Other imports, down 8.3%, although both these
categories are of relatively low significance. The most important increases took place in
capital goods (up US$ 1,403 million or 35.3%) capital goods parts and accessories (up US$
1,024 million or 34.5%) and intermediate goods, imports of which were up US$700.4 million
or 11.2%. Other relatively less important headings have recorded significant growth rates,
such as consumer goods (22%) and passenger vehicles (25.3%).
The structure of imports during the first nine months of 1997 compared to the same
period of 1996 shows an increase in the relative share of capital goods and parts and
accessories for capital goods to the detriment of intermediate goods and fuel, while consumer
goods and passenger vehicles maintained their relative share.
As to the origin of imports in the first nine months of 1997, 26.2% of Argentine
imports came from the Mercosur, marginally more than the 25.8% recorded in the same
period of 1996. NAFTA provided 25.1% of total foreign purchases, up from 24.7% in the
previous year. The European Union was the source of 28.6% of all imports, a slight drop from
the 29.3% recorded in the same period of 1996. Thus 79.9% of total imports have originated
from these three trading blocks.
Analysis by type of the imports from these blocks shows that 30.0% of Argentine
imports of capital goods have been supplied by NAFTA, with 29% coming from the EU, the
two regions together accounting for 68% of such imports.
Mercosur accounted for 31.2% of the intermediate goods acquired by Argentina
abroad and 26.6% of imports of parts and spares.
In the case of passenger vehicles the Mercosur and the EU together provided 75.5% of
the total (39% and 36.5% respectively).
Real Services5
In the third quarter of 1997 the real services deficit increased by US$ 185 over the
same quarter of 1996, an increase of 42.7%. Taking the first nine months of the year , the
deficit in real services has totaled US$ 2,357 million, 26.3% more than in the same period of
the previous year. As has been the case for some time, this was basically due to increases in
the negative balance of the transport account, particularly freight and tickets. The transport
account has accumulated a negative balance of US$ 1,197 million in the first nine months of
this year, more than half the total deficit in real services. The significance of this account can
be seen from the fact that 70% of the total increase in the negative balance of real services in
this period is explained by it.
Freight charges were a negative US$ 936 million, an increase of US$ 237 million (34%)
over the first nine months of 1996. The sustained increase in the negative balance of this
account has been due to the rise in Argentine imports, leading to higher freight charges, which
added to the loss of share by local transporters has meant increased payments of freight
charges to non resident companies.
The passenger ticket heading has recorded a deficit of US$ 523 million in the first nine
months of the year, an increase of US$ 118 million (29%) over the same period of the previous
year. There has been an increase in both credits and debits for this concept as a result of the
rise in volumes of international tourism that has led to growth in the sale of tickets to and
from abroad. The increase in the negative balance has been due to the fact that the increase in
ticket sale volumes recorded by foreign companies in Argentina has been greater than the
increase in the sale of airline tickets to non-residents by companies based in Argentina.
Other significant headings have been communications and other real services. In the
first nine months of 1997 the communications account built up a surplus of US$ 69 million, a
decline of 49% compared to the same period of the previous year. The reason for this drop
was the restructuring of telephone rates introduced at the beginning of this year6 which cut the
local cost of international calls, leading to an increase in calls from Argentina abroad, to the
detriment of calls made under “call-back” systems. As a result there has been an increase in
the outflow of currency generated by local telephone companies and they have reduced their
earnings from “call completion” covering the segment traveled by all international calls in
foreign territory. In the case of other real services, in the accumulated total for the first nine
months of 1997 there has been an increase in the negative balance of US$ 53 million (94%).
This deterioration has mainly been due to two factors:
1)
increased commissions paid by the public sector to non-resident financial
institutions for the placing of securities and share issues; and
2)
lower income from commissions paid by importers abroad to resident banking
entities on foreign trade transactions. This behavior is explained by the policy adopted by
Argentine exporters of
cutting importer costs to increase the competitiveness of their
products.
Investment Income7
In the third quarter of 1997 the deficit in investment income was US$ 1,001 million,
up US$ 179 million over the same period of the previous year, following increases in the net
payment of interest and earnings and dividends. These reflect higher external borrowing,
increased foreign direct investment and higher profits by companies on their direct
investments in various productive sectors. These also explain the increase recorded in the net
outflow of investment income accumulated in the first three quarters of the year from US$
2,178 million to US$ 2,804 million.
III.
Capital and Financial Account Banking Institutions
Financial institutions (excluding the BCRA) recorded a net inflow of US$ 455 million
in the quarter.
As in the second quarter the greatest growth in assets was in the loans to non-residents
and other lending category which in part reflects claims by financial entities under security
repurchase agreements. Cash holdings rose in line with compliance with the meeting of
liquidity requirements in New York due to the increase in deposits locally and the increase of
one point in the liquidity requirements themselves.8
Direct investments by financial
institutions in overseas subsidiaries fell by US$ 122 million following the transfer of external
assets to the private non-financial sector. Portfolio investments - mainly securities issued by
foreign governments - increased during the quarter by US$ 500 million.
Compared to the second quarter of the year liabilities rose by US$ 1,780 million,
explained by the increased level of deposits by non-residents (US$ 524 million) from the
repayment of credit lines (US$ 129 million) and the increase in funds inflows under sundry
financial liabilities for an amount of US$ 1,515 million, partly offsetting the increase in other
loans from securities repurchase transactions.
In the case of liability transactions from foreign credit lines, on a six-monthly basis
financial entities provide information on the amount of financing received9 and it use locally,
either for financing exports, imports, financial loans or other applications, together with the
rates of interest at which the entities have taken the credit lines10 . From analysis of the
information provided for the last four half-years (June 30, 1997, December 31, 1996, June 30,
1996 and December 31, 1995) the following has been noted:
a.
The composition of the application of the funds is mainly linked to foreign
trade activities: export financing (39%), import financing (28%), financial loans (12%) and
other applications (21%).
b.
In the first half of the year there was a significant increase in the share of lines
in yen, taking advantage of the difference in market rates.
c.
Regarding the rates at which loans were taken, a classification was performed
by type of application and by range of interest rates, eliminating extremes. The most usual
rates for the various applications were fairly close to the rates paid for foreign currency term
deposits taken locally, which at the end of the four half-years under consideration stood at
7.54%, 5.87%, 6.12% and 5.83% p.a. respectively. The advisability of such borrowing lies in
the longer terms available, in excess of 180 days, while the average for local deposits is 30 days.
During the quarter new foreign investors entered the financial system with the change
in hands of 5 entities and increased participation in capital by another investor recently
entering the Argentine financial system. These direct investments for an estimated value of
US$ 1,382 million are allocated to the sector receiving the foreign funds in exchange for the
shareholding (the private non-financial sector). These transactions have helped to consolidate
foreign investment in the financial system in entities with differing profiles11 .
The Non-Financial Public Sector and the Central Bank
Non-financial public sector and Central Bank financial account transactions resulted
in a net inflow of US$ 277 million, less than had been recorded previously by the sector,
mainly a result of having used the financing that had been brought forward in previous
periods, the repurchase of government securities from non-residents from swap agreements
reached in 1996, the lack of inflows from non-residents from privatizations and a higher level
of debt repayment.
The most significant transaction during the period was the exchange and repurchase of
bonds from the 1992 Financing Program through the issue of a 30-year Global Bond. The
redemption of Par, Discount and Floating Rate Bonds was carried out for an amount of US$
2,995 million12 (residual par value), whereas the Global Bond due 2027 was issued for
US$ 2,250 million. As a result, in nominal terms public sector debt was reduced by US$ 745
million.
The exchange and repurchase transaction implied the release of principal and interest
guarantees for a par value of US$ 2.7 billion established in the form of Zero Coupon US
Treasury Bonds. The sale of the released Zero Coupon Bonds generated a difference between
the purchase value in 1993 and the date of sale amounting to US$ 238 million.
In addition, during the quarter the National Government placed a Eurobond issue in
pesos for 500 million (the third such issue in local currency carried out on international
markets) for a term of 5 years at a rate of 8.75%, paid half-yearly. A 10-year bond in lire was
also issued (covered by a currency and rate swap transaction against the US dollar) for US$ 439
million with a half-yearly interest coupon at 8.34% p.a..
The Central Bank recorded a net outflow of US$ 106 million, mainly because of IMF
debt repayments.
Local government transactions have included placements abroad by the provinces of
Mendoza for US$ 227 million and by Tucumán (notes) for US$ 193 million and the repayment
of US$ 97 million of the Euronote issue that had been made by the Province of Buenos Aires.
Non-Financial Private Sector
As high liquidity continued to be experienced on international markets during the third
quarter the non-financial private sector again absorbed significant financing from abroad13 .
Issues of bonds continued with the trend observed in previous quarters, totaling US$ 1,986
million. The face value of issues placed during 1997 has thus exceeded US$ 5 billion. Net
quarterly capital inflow amounted to US$ 1,424 million, while net indebtedness documented by
bonds exceeded US$ 3.8 billion in the first nine months of 1997.
The financial conditions of the issues made during the third quarter have continued to
evidence the trend noted in previous quarters for an increase in the average term.
The volume of bonds issued was the highest since the fourth quarter of 1994, and 77%
of the securities issued by the non-financial private sector were for terms in excess of five
years. The average life of these loans is 8 years and the yield 8.78%.
Other capital movements during the quarter recorded a negative balance of US$ 2.1
billion. This balance can partly be explained by net sales of national and local government
bonds by non-residents to residents for a market value in the order of US$ 500 million, by the
capitalization of income earned on external assets and by the fact that to a large extent the
offsetting item to the direct investment leading to changes in ownership has been channeled
through investments in foreign and/or domestic assets via accounts located abroad.
Conversely, it should be noted that in the case of the sale of YPF stock from the Employee
Stock Ownership Program for a total of US$ 945.7 million, 85% was placed on foreign
markets (balance of payments revenue). These funds were received by company employees
(private non-financial sector) and were partly used to settle the debt for US$ 569 million that
they held with the National Government from the transfer of the shares (a transaction
between residents with no impact on balance of payments statistics).
Foreign Direct Investment
Estimates of the flow of foreign direct investment by non-residents for the third
quarter of 1997 amounted to US$ 2,252 million, the highest amount recorded on the
1992-1997 quarterly statistical series.
The size of this inflow has been due to the recording of the sale of shareholdings in
local banks to direct non-resident investors, announced during the first half of the year and
actually carried out only in the third quarter of the year. These transactions have had an
estimated value of US$ 1,382 million14 , being followed in size by transactions for changes in
ownership in the transport and communications sectors (US$ 119 million), real estate (US$ 74
million) and the auto industry (US$ 41 million). Overall the contributions and changes of
ownership in the non-financial public sector amounted to US$ 1,922 million, accounting for
85% of total FDI during the quarter.
During the quarter no major transfers of shareholdings were recorded in either
provincial or national non-financial public sectors15 .
The significance of the inflow of FDI during 1997 so far is reflected in the fact that
the total FDI accumulated during the first three quarters of the year has been US$ 4,537
million, exceeding the annual estimates for the 1992-1996 statistical series.
External assets and liabilities
The drop in international reserves held by the Central Bank from the partial financing
of the current account during the quarter has mainly involved the use of external financing that
had been brought forward by the National Government. There has been a notable reduction
in the share of gold in the composition of international reserves, as has been happening since
the end of 1996. This change has been a result of the sale of gold by the monetary authorities
between January and July this year to hedge against price fluctuations and to be able to earn
income on this portion of the reserves.16
The external assets of the banking sector (excluding the BCRA) totaled US$ 17,022
million, an increase of US$ 1,359 million on the previous quarter and US$ 7,240 million higher
than in the third quarter of 1996 (an increase of 74%). As indicated in the previous Economic
Report this increase was partially due to deposits abroad under the new liquidity requirements,
the increase in such requirements established by the Central Bank, placements in the form of
loans and other credits to non-residents and portfolio investments in foreign securities.
The external assets of the non-financial private sector were estimated (by means of the
residual method) at US$74 billion.
Total gross external debt grew US$ 10,331 million in the last twelve months17 , reaching
US$105,470 million on September 30, 1997.
During the quarter there has been a reduction in the balance of gross indebtedness of
the non-financial public sector and the BCRA of US$ 1,583 million, basically as a result of a
reduction in the debt in nominal par value from the redemption and exchange transaction
involving 1992 Financing Program Bonds , the set sale by non-residents of national and
provincial government securities on secondary markets, the revaluation of the unit of account
(the US dollar) and the settlement of government security swap transactions (US$ 263 million).
The remaining debt placement operations and new disbursements net of repayments have
represented a net increase of US$ 790 million.
Liabilities in the banking sector increased by 13% in the quarter and 39% (US$ 6,576
million) for the year because of an increase in the volume of deposits taken and the absorption
of other external short-term funds. The sector’s external debt was US$ 18,721 million, 36%
higher than the level reached on September 30, 1996.
Compared to the situation at
September 30, 1996, the net external position (liability) fell by US$ 664 million.
The external debt of the private sector amounted to US$ 13.7 billion, an increase of
42% over the total at September 30 the previous year.
1 The estimation methodology for the balance of payments is being reviewed and updated. New accounts will be included such
as direct borrowing by the private sector and its income, non-resident investment in shares, direct investment in the Argentine private
non-financial sector and fees of operators in privatized companies. Other accounts such as travel and royalties will also be improved.
The “Quarterly Estimates of the Balance of Payments and External Assets and Liabilities 1996 and first three quarters of 1997”
brochure includes tables with additional information. The World Wide Web address is “http://www.mecon.ar/progeco/caratul.htm”.
2 The market value of the transaction is US$ 2,250 million. The amount of debt exchanged is included under “Other capital
movements” in the public sector and the securities issued are included under “Long-term debt”.
3 It is assumed that much of the funds received by residents has remained abroad. See comments under “Other capital
movements” in the capital and financial account.
4 Analysis of imports by category and by origin has been made at CIF values as no FOB data is available because of temporary
difficulties derived from the recent implementation of the Single Customs Document (“Documento Unico Aduanero -DUA).
5 The estimation methodology for the real services accounts is being reviewed and updated. New accounts will be included such
as the rates paid to privatized companies and road freight, and the estimation of other accounts such as travel and royalties will be improved.
6 Balance of payments estimates for this account are based on information provided by resident telephone companies. Part of
the mentioned reduction in net income should be offset by the reduction in payments under the “call-back” system.
7 Estimates of capital transactions and income from the following sectors are being calculated: direct indebtedness by the
non-financial private sector, portfolio investment by non-residents in resident companies, and direct foreign investment by Argentine
companies.
8 The liquidity requirement rate is currently 19%.
9 Information in the survey is related to documentary credits (even though there may not be a funding commitment by the
entities), credit lines with entities (when funding but not when guaranteeing), financing from foreign financial entities for loans or advances
granted to local exporters on account of future collections and overdrafts. Lines received are only detailed if in excess of $ 100,000; otherwise
they are grouped under sundry applications.
10 Alternatively, information on external financing can be obtained from the balance sheets for financial entities provided by the
Central Bank, which on the balance of payments is denominated credit lines for financial entities. Credit lines include borrowing for the
pre-financing of exports, notes purchased, discounts of letters of credit or bills and import credit lines. In addition the balance of payments
includes sundry obligations from overdrafts and other transactions not included under the other headings.
11 Indicators of the participation of branches and ATMs of various entities by geographical area show that entities with direct
foreign participation play a leading role, in particular in the city of Buenos Aires and surrounding urban districts. The average number of
branches per entity for the group recording FDI is 25, compared to 29 for the system as a whole. However, 30 of the 56 entities considered
in the study have no branches and/or no ATMs. The number of ATMs is higher for the group of banks with FDI (22 and 19 for entities
with FDI and the financial system as a whole respectively) evidencing the increased geographical spread in the search for customers following
the introduction of new services at lower cost.
12 Par Bonds for US$ 2,184 million, Discount Bonds for US$ 515.7 million and Floating Rate Bonds for US$ 295.3 million.
13 Excluding estimates of direct debt of the sector in the process of being surveyed.
14 These transactions are recorded on the balance of payments as an inflow of capital in the non-financial private sector, as this is
the sector receiving the financing: they represent a source of financing for the previous owners of the shareholdings and not for the financial
system.
16 See BCRA Communication No.30049 dated December 2, 1997.
17 Excluding direct private sector debt with banks and suppliers, in the process of being surveyed.