Transactions in the Foreign Exchange Market and Exchange Balance

Overview Transactions in the Foreign Exchange Market and Exchange Balance Foreign Exchange Transactions and Exchange Balance in December 217 In December 217, the National Treasury sold US$ 95 million, which were bought directly by the Central Bank of Argentina (BCRA). In turn, the remaining institutions from the public sector, together with banks and other institutions, sold US$ 438 million and US$ 254 million, respectively, which were purchased by private sector clients through the Foreign Exchange (Forex) Market. In a context where the BCRA has not had a net intervention with entities in the Foreign Exchange Market, the volume traded reached a total of US$ 5.14 billion (equivalent to a daily average of US$ 2.64 billion), maximum level on record in the history of the foreign exchange market, and posted an increase of 2% in year-on-year (y.o.y.) terms. Current account transactions in the exchange balance evidenced a deficit of US$ 1.77 billion, resulting mainly from net outflows for the Primary Income and Services accounts for US$ 1.12 billion and US$ 891 million, respectively. In turn, these movements were partially offset by net inflows from the Goods account for US$ 22 million as a result of collections on exports for US$ 4.45 billion and payment for imports for US$ 4.23 billion. The capital and financial account pertaining to the Non-Financial Private Sector (SPNF) recorded net outflows for US$ 1.43 billion, thus exhibiting a drop of US$ 2.56 billion against the surplus of the same month of 216. The main reason behind this stock reversal was the purchase of foreign assets. It is worth pointing out that most inflows from the tax amnesty were recorded in December 216, a fact that explains the atypical performance observed in such month and that limits the year-on-year comparison. The capital and financial account transactions of the Financial Sector resulted in a surplus of US$ 289 million, mainly explained by net inflows from financial loans and debt securities for US$ 296 million and by a fall in liquid external assets of entities making up the Exchange Position (PGC) for US$ 98 million, partially offset by the use of funds for the primary market underwriting of securities for US$ 14 million. The foreign exchange capital and financial account of the public sector and the BCRA evidenced a surplus of US$ 2.75 billion, mainly due to inflows in foreign currency from the National Treasury because of the net issue of LETES denominated in dollars for US$1.35 billion and financial loans and debt securities for around US$1.3 billion. As a result of these transactions, international reserves held by the BCRA went up US$ 492 million over the month, reaching a peak of US$ 56.42 billion on December 22, 217, and closing the year at US$ 55.6 billion. During 217, international reserves increased by US$ 15.75 billion. Throughout 217, the BCRA made net purchases in the foreign exchange market for US$ 16.4 billion (US$ 16.12 billion purchased directly from the National Treasury and US$ 88 million sold to entities). In turn, institutions and the remaining entities of the public sector sold US$ 7.36 billion and US$ 5.9 billion, respectively, which were purchased by clients of the private sector through the Forex Market. Transactions in the Foreign Exchange Market BCRA 1

I. Transactions in the Foreign Exchange Market 1 In December 217, the BCRA made direct purchases from the National Treasury for US$ 95 million of funds deriving from debt issues by the National Government. In turn, the remaining entities of the public sector, together with banks and other institutions, sold US$ 438 million and US$ 254 million, respectively, which were purchased by clients from the private sector through the foreign exchange market (see Chart I.1). Chart I.1 Result of Transactions Broken Down by Sector December 217 SALES 95 438 254 PURCHASES -691-95 National Treasury Other Pub. Sec. Priv. Sec. Institutions BCRA INSTITUTIONS CLIENTS: -254 Explanatory Notes Pursuant to Communication A 6244, as from July 1 st, 217, new provisions entered into force to regulate the foreign exchange market, and among the changes made, such provisions established that the information of reasons (headings) for the transaction was no longer a sworn statement but it was only required for statistical purposes. This circumstance limits the historical comparison of series by heading Another situation that must be explained is that when funds are cleared into the country from abroad, there is an option to receive an equivalent amount in pesos (an exchange transaction ) or a direct deposit may be requested in a foreign currency local account ( swap transaction ). Even though, in both cases, the inflow is recorded for the heading corresponding to the transfer (+ sign), the difference lies in the fact that in the case of a swap, a second record is made for the same amount ( sign) for the deposit of funds in the account, as if the foreign currency were purchased (this second record is included in an account within the financial account, not subtracting such amount from the specific account where the funds were deposited). Likewise, a payment 1 The Central Bank s website (www.bcra.gob.ar) contains the different statistical series of the Foreign Exchange Market (to access the statistical series, click here), together with an annex broken down by sector and main headings (to access the statistical Annex of the exchange balance, click here). In addition, it is possible to go over the Main differences between the balance of payments and the foreign exchange balance (available in the Publications & Statistics section, subsection Foreign Sector / Foreign Exchange Market, to access the text click here). Transactions in the Foreign Exchange Market BCRA 2

abroad with foreign currency deposited is recorded for the heading corresponding to payment (- sign) and another record (+ sign) for the debit from the account. Consequently, the total result in the exchange market of swap transactions is neutral. Taking into account the information appearing in the preceding explanatory notes, and the effects on the reading of information, the result of institutions foreign exchange transactions with their clients by sector was broken down to differentiate net purchasers from net sellers (see Chart I.2). This analysis reveals that the main sectors with net purchases were natural persons (included in Private Sector Other ) and net importers, such as the Automobile Industry, followed by the sectors of Commerce and Machinery and Equipment. This deficit was partially funded by net sellers of foreign currency, among which the Oilseeds and Grains, Public Sector, Energy, Food, Beverages and Tobacco and Mining sectors stood out. Chart I.2 Institutions with Clients by Sector. Foreign Exchange Market December 217 Total -254 Other Business From The Private Sector -1.114 Motor Vehicles Industry -887 Retail and Wholesale Business Machinery and Equipment Transportation Chemical Manufacturing, Rubber and Plastic PURCHASES -482-463 -364-36 Financial and Exchange Institutions Mining Foodstuff, Beverages and Tobacco Energy Public Sector 23 3 355 386 438 SALES Grains and Oilseeds 1.68 In terms of the heading behind the reason of entities foreign exchange transactions with their clients, the main factor explaining December result was the net purchase of foreign assets by the non-financial private sector (see Chart I.3) for US$ 2.74 billion 2, one of the highest amounts of the year. The most important component of this total was the net purchase of banknotes for US$ 2.44 billion, reaching the highest level on record since December 215. It is important to highlight that part of these funds tend to remain in the domestic financial system as deposits in foreign currency, which, altogether, went up by around US$ 1.3 billion. The purchase of foreign assets was rounded out with net transfers abroad by residents totaling US$ 296 million, the lowest level of the last seven months, due to a rise in the repatriation of funds from abroad (an increase of US$ 49 million against the average of the previous six months). 2 See Chart 7. Purchase of Foreign Assets by the Non-Financial Private Sector, appearing in the Statistical series of the Foiregn Exchange Market (to see the statistical series clic here). Transactions in the Foreign Exchange Market BCRA 3

Other factors behind net purchases were the net outflows for Services for US$ 89 million, and net payments for Primary and Secondary Income totaling US$ 479 million. Conversely, the main sources of the Forex Market resulted from net inflows from abroad and the settlement of financial loans and debt securities for around US$ 1.4 billion 3, securities transactions by entities for US$ 1.31 billion (including primary market underwriting and secondary market transactions) and investments by nonresidents for US$ 876 million, mainly devoted to portfolio investments. Besides, sales of foreign currency for US$ 45 million by other institutions of the public sector, particularly resulting from loan taking with international organizations, included in the Financial Debt and Other account of Chart I.3, were recorded during the period. In turn, after three months in a row of net payments, the transactions for Goods ended December with a net inflow for US$ 22 million due to collections on exports for US$ 4.45 billion (down 4% in year-on-year terms) and payment of imports for US$ 4.23 billion (up 1% y.o.y.). Transactions in which clients do not report the heading (equivalent to 3% of the total volume traded in the market) accounted for a net inflow of US$ 829 million, the highest level of net inflows since the implementation in July 217 of the provisions under which reporting of transaction codes (headings) is no longer mandatory. A transaction-based analysis reveals that inflows are estimated to be mainly related to repatriation of funds by residents from their own accounts abroad and, to a lesser extent, to inflows for services rendered abroad. 3 This figure excludes the record of foreign currency purchases to be delivered to the institution to pay the balance in foreign currency for the use of credit cards abroad, which is estimated to stand at US$ 4 million in December 217. (See the item of the memorandum of Chart 1. Net purchases of bills and coins to clients appearing in the Statistical Series of the Foreign Exchange Market, click here).these local debt settlement transactions in foreign currency with institutions belonging to the system do not imply a net demand in the whole system, made up by institutions and the Central Bank. The deficit for these uses was calculated in the heading Travel, Passenger Transport and Other Expenses Paid with Credit Card at the time of transfers of payments abroad. Transactions in the Foreign Exchange Market BCRA 4

Chart I.3 Foreign Exchange Market Clients December 217 Millions dollars 22 1.35 876 1.824 829-89 -479-1.22-254 -2.737 Goods Services Primary and Secondary Income Non-financial private sector external assets Transactions with securities Non-residents investments Swaps Financial Loans and others Non reported concept *Note: the total result in the exchange market of swap transactions is neutral, the inflow is recorded for the heading corresponding to the transfer (+ sign), and a second record is made for the same amount ( sign) for the deposit of funds in the account, as if the foreign currency were purchased. Clients In turn, swap transactions recorded a net inflow of funds from abroad for a total of US$ 1.2 billion. Although the result was neutral in the Forex Market, these inflows impacted immediately on domestic deposits in foreign currency for the same amount (see Chart I.4). In this respect, the following transactions stood out: net inflows without reported heading, which generated an increase in deposits for almost US$ 55 million, financial debt net inflows for US$ 427 million and repatriation of residents external assets for US$ 258 million. Chart I.4 Net Change of Local Deposits for Swap Transactions 1.22 31 258 63 427 549-36 -92 Goods Services Primary and Secondary Income Non-financial private sector external assets Non-residents investments Financial Loans and others *Note: Exchange transactions generate a direct impact on local deposits in foreign currency of the system Non reported concept Net change of local deposits for swap transactions Transactions in the Foreign Exchange Market BCRA 5

In turn, the BCRA, in addition to the direct net purchases from the National Treasury of funds deriving from National Government debt issues for US$ 95 million, made payments for foreign trade transactions arranged through the Domestic Currency Payment System (Sistema de Pagos en Monedas Locales, SML ) in force with Brazil and Uruguay and through ALADI (Latin American Integration Association) for US$ 59 million (see Chart I.5). Chart I.5. BCRA s International Reserves Variations December 217 Million dollars 2.469 95 59 492-59 -95-1.978 BCRA Purchases: +95 SML and ALADI BCRA MULC Direct purchases to the NT National Treasury National Treasury National Treasury deposit variations of issues paid to Int. Org. for direct sales And securities Other net movements International Reserves variation *Note: Includes, among other operations, changes in the accounts of entities in foreign currency, the performance of reserves, adjustments by exchange rate and Valuation, purchase and sale of securities, transfer of National Treasury accounts that are part of the international reserves and operations of the BCRA. Likewise, increases were evident in the inflows in foreign currency due to the issue of National Treasury Bills (LETES) for US$ 2.47 billion 4, which were used in part to face LETES maturities for US$ 1.12 billion and for the cancellation of principal and interest with International Organizations and holders of other securities denominated in foreign currency for US$ 86 million (among which the payment of interest of Discount Bonds and the International Bond due 2117 for US$ 54 million and US$ 98 million, respectively, stood out). In view of all these transactions, BCRA s international reserves went up US$ 492 million during December, reaching a historical peak of US$ 56.42 billion on December 22, 217 and closing with a stock of US$ 55.5 billion by the end of the month (see Chart I.6). 4 Besides, there were issues of LETES denominated in dollars and underwritten in pesos for an amount equivalent to US$ 423 million which were not initially recorded on the exchange balance. These transactions are not included in the exchange balance at the time of underwriting as there is no transaction in foreign currency involved at this initial stage. The payment made in foreign currency by the National Treasury is included at the time of maturity. Transactions in the Foreign Exchange Market BCRA 6

Chart I.6. BCRA s International Reserves 7. 57. 54. Diary - Year 217 6. 5. 51. 48. 45. 42. 39. Jan-17 Apr-17 Jul-17 Oct-17 55.55 4. 3. 2. 1. J-3 J-3 J-4 J-4 J-5 J-5 J-6 J-6 J-7 J-7 J-8 J-8 J-9 J-9 J-1 J-1 J-11 J-11 J-12 J-12 J-13 J-13 J-14 J-14 J-15 J-15 J-16 J-16 J-17 J-17 At the end of each month Throughout 217, the BCRA made purchases in the foreign exchange market for US$ 16.4 billion, out of which US$ 16.12 billion were purchased directly from the National Treasury (funds deriving from the issue of debt securities by the National Government) and US$ 88 million were sold to entities. In turn, the entities together with the remaining institutions of the public sector sold US$ 7.36 billion and US$ 5.9 billion, respectively, which were purchased by private sector clients through the foreign exchange market (see Chart I.7). Transactions in the Foreign Exchange Market BCRA 7

Chart I.7 Result of Transactions per Sector Year 217 16.124 SALES 5.93 7.362 PURCHASES -12.543-16.37 National Treasury Other Pub. Sec. Priv. Sec. Institutions BCRA INSTITUTIONS CLIENTS: -254 The net purchases made by clients from entities for US$ 7.45 billion (see Chart I.8) mainly resulted from the net purchase of foreign assets of the Non-Financial Private Sector (SPNF), net outflows for Services and Primary and Secondary Income, which, in turn, were partially offset by net inflows from abroad of financial loans and debt securities, investments by nonresidents (particularly those devoted to short-term investments), pesification of deposits of public sector institutions and net inflows for Goods. Gráfico I.8 Mercado de Cambios y variación de Reservas Internacionales del BCRA - Año 217 22.959 Millones de dólares 56.781 Millones de dólares 12.296 16.124 15.747 4.34 3.63 68-1.33-88 -972-4.643-7.45-16.124-1.787-13.371 BCRA Purcheases: +16.37-38.941-22.148 Bienes Servicios Ingreso primario y secundario Act. Ext. de SPNF Tít.val. de ent. Inv. de no residentes Acred. a clientes locales Deuda Fin. y Concepto no otros informado Clientes SML y ALADI BCRA en el Mercado de Cambios BCRA al TN Variación de Colocaciones depositos del TN Gob. Nac. por operaciones con BCRA Pagos Org.Int. y Tit.Val. GobNac (K e I) Otros netos* Variación Reservas Internacionales *Note: Includes, among other operations, changes in the accounts of entities in foreign currency, the performance of reserves, adjustments by exchange rate and Valuation, purchase and sale of securities, transfer of National Treasury accounts that are part of the international reserves and operations of the BCRA. Apart from the abovementioned foreign exchange transactions, the BCRA made payments for foreign trade transactions arranged through the Domestic Currency Payment System (SML) in force with Brazil and through ALADI for US$ 1.3 billion. The main factor behind the increase in international reserves during 217 was related to inflows from the National Government debt issues, both domestically and internationally, which, net of payments for principal and interest at maturity, totaled an annual rise of US$ 17.85 billion, which were mainly purchased by the BCRA. Transactions in the Foreign Exchange Market BCRA 8

As a result, the gross accumulation of reserves by the BCRA amounted to US$ 15.75 billion in 217, ending the year with a stock equivalent to 1.1% of GDP (see Chart I.9). Chart I.9 BCRA's Gross International Reserves 12% % GDP 1% 4.17: Reserves Purchases announcements 9,1% 8,8% 9,% 1,1% 8% 7,7% 6% 5,7% 6,8% 6,6% 6,1% 4% 2% % Dic-15 Mar-16 Jun-16 Sep-16 Dic-16 Mar-17 Jun-17 Sep-17 Dic-17 Note: International Reserves and GDP in pesos, with an estimate for the fourth trimester of 217 II. Volumes Traded in the Foreign Exchange Market 5 In December, the volume traded in the foreign exchange market 6, without a net intervention by the BCRA with institutions in the market, totaled US$ 5.14 billion (equivalent to a daily average of US$ 2.64 billion), reaching the maximum level on record in the history of the foreign exchange market, and recorded a 2% rise in year-on-year terms. This increase was mainly due to transactions arranged among authorized institutions, and between the latter and their clients. In the month under analysis, the transactions made between entities and their clients 7 accounted for 71% of the total volume traded in the Forex market (down 2 percentage points (p.p.) against December 216), while the remaining 29% was arranged between authorized institutions. 5 The Central Bank s website contains the quarterly ranking broken down by institution for the volume traded in the foreign exchange market with clients (to access the Ranking click here). 6 It includes the volume traded by institutions authorized to carry out foreign exchange transactions with their clients, between authorized institutions and between the latter and the BCRA. It is worth noting that the volume traded between institutions and the BCRA implies the full value of the daily net balance in order to count only foreign exchange transactions against pesos, aiming at removing from the analysis any transactions where there are changes of instrument with no difference as to the exchange rate agreed upon, for example, in the case of swaps. 7 The record for underwriting of Central Bank Bills and the swap transactions of clients with other countries that totaled US$ 2.63 billion in December 217 are excluded from the volume traded by authorized institutions and their clients. Transactions in the Foreign Exchange Market BCRA 9

6. 5. Chart II.1. Volume Traded in the Foreign Exchange Market Total volume traded in the Exchange Market Volume traded between authorized institutions and their clients Volume traded between authorized institutions Volume traded between authorized institutions and BCRA 4. 3. 2. 1. Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Within the framework of a more dynamic and unrestricted market, foreign exchange transactions between banks and other financial and exchange institutions recorded a year-on-year increase of 35% and closed December with a record-high volume of US$ 14.41 billion. If this total is broken down by type of institution, foreign private banks accounted for a little over half the total (51.6%) while national private banks accounted for 43% of the total and the remaining 5.4% was distributed among public banks (with a share of 4.9%) and foreign exchange firms and brokers (.5%). In turn, the volume traded between authorized institutions and their clients broke a new historical record in December, totaling US$ 35.73 billion (up 18% in year-on-year terms) and keeping the concentration observed over time: out of the 98 institutions that carried out foreign exchange transactions over the month, the first ten institutions (all of them banks) accounted for 81% of such transactions, and this share increases by 1 percentage points if the first fifteen institutions are taken into account. Upon analyzing the evolution of the volume traded with clients according to the share of the main headings, the transactions included in the Capital and Financial Account and Other recorded a rise of 8 percentage points (p.p.) against the figure posted in December 216 (see Chart II.2) to the detriment of the transactions for the remaining headings ( Goods, Services and Primary and Secondary Income, which posted drops of 5 p.p., 2 p.p. and 1 p.p., respectively). By the end of the last month of the year, capital and financial transactions accounted for 67% of the volume traded with clients, mainly due to the incidence of securities transactions, foreign assets of residents (banknotes and foreign currencies) and investments by nonresidents (see Chart II.2), followed by Goods and Services with a share of 24% and 7%, respectively. Transactions in the Foreign Exchange Market BCRA 1

Chart II.2. Volume Traded with Clients in the Forex Market and Share per heading 9% Share 36. 8% 32. 7% 28. 6% 24. 5% 2. 4% 16. 3% 12. 2% 8. 1% 4. % Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Volume traded between authorized institutions and their clients Services Capital and financial Goods Primary and Secondary Income The distribution of transactions with clients broken down by type of institution was once again led by foreign private banks, which accounted for 64.9% of transactions, more than doubling national private banks, which represented 25.8%, while public banks (8.9%) and foreign exchange firms and brokers (.5%) accounted for the remaining 9.3%. From the standpoint of the currency used, the US dollar remained in first position against all other currencies used, accounting for 97.2% of total transactions between the institutions and their clients while the remaining currencies used for foreign exchange transactions were distributed as follows: euros (2.5%), and other 42 currencies (.3%). Throughout 217, the volume traded in the foreign exchange market totaled US$ 482.6 billion (around US$ 2 billion on average per day), out of which 73% corresponded to the transactions between authorized entities and their clients, 26% to the volume traded among institutions and the remaining 1% resulted from the transactions made between the latter and the BCRA, which ended 217 with the lowest level of net intervention since 28 (see Chart II.3). The total volume of transactions implied a rise of 37% against the level of the previous year, an improvement mainly explained by the transactions between clients and authorized institutions and by the latter among themselves. Transactions in the Foreign Exchange Market BCRA 11

Chart II.3 Foreign Exchange Market Volumen and Share 26% 27% 18% 17% 217 216 215 214 Anual Forex Market Volume Year 214: US$ 242.11 millions Year 215: US$ 238.661 millions Year 216: US$ 351.769 millions Year 217: US$ 482.61 millions 7% 6% 1% 2% 77% 75% 71% 73% Volume traded between Institutions and Clients BCRA's traded volume Volume traded between Institutions II) Exchange Balance 8 III) a. Exchange Current Account Current account transactions on the exchange balance evidenced a deficit amounting to US$ 1.77 billion in December 217, resulting from net outflows for the Primary Income and Services accounts for US$ 1.12 billion and US$ 891 million, respectively, which were, in turn, slightly offset by net inflows from the Goods account for US$ 22 million and the Secondary Income account for US$ 25 million. The deficit of the current account throughout 217 totaled US$ 17.5 billion, thus exceeding the deficit of 216 (US$ 15.57 billion). The main reason behind this deficit is the drop of inflows in the both Goods and the Secondary Income accounts which, added to the increase in net outflows of the Services account, exceeded the reductions in net outflows for the Primary Income account (joint effect in Interest and Profits, Dividends and other Income ). 8 The exchange balance includes transactions carried out by institutions with their clients through the foreign exchange market and those carried out directly with international reserves of the Central Bank recorded in its equity evolution. Transactions in the Foreign Exchange Market BCRA 12

Exchange current account In million de dollars Month Dec-16 Total 216 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sept-17 Oct-17 Nov-17 Dec-17 Total 217 Exchange current account -1.395-15.574-677 -99-811 -1.315-961 -1.522-1.388-1.139-1.595-2.258-2.713-1.765-17.52 Transfers of goods 443 8.93 1.57 252 64 731 863 373 32 295-97 -132-476 22 4.28 Services -584-9.4-1.151-98 -833-71 -762-74 -97-1.44-913 -983-951 -891-1.847 Primary Income -1.32-15.95-627 -277-661 -1.377-1.95-1.19-749 -413-616 -1.173-1.31-1.118-1.65 Secondary Income 49 433 44 24 43 32 33 34 29 24 31 3 24 25 372 III) a.1. Goods Transactions related to transfers of goods on the exchange balance exhibited net inflows from abroad for US$ 22 million, resulting from receipts from exports for US$ 4.45 billion and from the payment of imports for US$ 4.23 billion (see Chart III.1). This exchange surplus implies a reversal against the flows of the previous three months. If compared to the performance observed in December 216, receipts from goods exports fell by 4% while payments for good imports went up 1%. Consequently, 217 ended with a surplus for transfers of goods for US$ 4.3 billion, down 5% against the figures recorded in 216, mainly explained by a rise in the payment of imports (9%) which exceeded the increase in the receipts from goods exports (1%). Chart III.1 Goods-Related Transfers 9, Million US$ 9, 7, -4% 7, 5, 5, 3, 3, 1, 1, -1, -1, -3, -3, -5, -5, -7, -9, Payments for goods imports Collectios on goods exports Goods related transfers Jan-14 May-14 Sept-14 Jan-15 May-15 Sept-15 Jan-16 May-16 Sept-16 Jan-17 May-17 Sep-17 +1% -7, -9, III) a.1.1. Collections on Goods Exports The Oilseeds, Oils and Grains sector settled receipts from goods exports for US$ 1.76 billion in December, an amount similar to that of the same month of 216 (see Chart III.2). However, throughout 217, the sector recorded inflows from collections on goods for a total of US$ 26.64 billion, down 3% against 216 figures (around US$ 75 million). In the comparison between 217 and 216, the year-on-year decrease was mainly due to lower inflows from advances and international prefinancing, which totaled US$ 8.54 billion, thus posting a 36% year-on-year drop (equivalent to US$ 4.82 billion). This drop was partially offset by inflows from collections after shipment and Transactions in the Foreign Exchange Market BCRA 13

prefinancing granted by domestic banks 9, which amounted to US$ 12.96 billion and US$ 5.14 billion, up 28% and 33% in year-on-year terms, respectively. Chart III.2. Collections on Goods Exports Oilseeds and Grains 4. Total 214: 27.832 Total 215: 22.975 Total 216: 27.387 Total 217: 26.635 (-3% y.o.y.) 3.62 3.5 3. 2.5 2. 1.5 1.794 1.741 1.485 3.328 3.13 3.247 1.996 1.59 2.22 +27% 1.84 1.786 1.428 1.399 1.184 2.743 2.726 3.284 2.913 1.762 1.365 1.381 +19% 2.134 2.891 1.844 2.39 2.5 3.397 2.443 2.447 2.327 2.42 2.252 2.189 2.145 1.937-18% 1.88 +1% 1.824 1.76 1.741 1.75 1.412 3.35 2.719 2.637 2.553 1. 656 5 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Advance collections from clients and prefinancing of export Rest of export collections Regarding the exports-to-inflows from collection on goods ratio, in December, total settlements through the foreign exchange market exceeded exports for around US$ 2 million, reaching a surplus of around US$ 1.15 billion throughout 217, i.e. US$ 35 million more than the excess settlements over exports seen in 216 1 (see Chart III.3). On the other hand, the Export Sworn Statements (Declaraciones Juradas de Ventas al Exterior (DJVE)) 11 totaled US$ 1.5 billion in December, exhibiting an 8% drop in year-on-year terms 12. This fall was mainly due to lower foreign sales of soybean pellets for around US$ 4 million, followed by lower sales of wheat for 9 In order to explain the increase in prefinancing granted by domestic banks in 217, it is worth mentioning that a set of innovative regulations impacted positively on the decisions made by exporters, such as the increase in the lending capacity in foreign currency by domestic banks (Communications A 598 and A 631) and, in the same sense, the generation of a higher lending capacity for the financial sector (reduction of the minimum reserve requirements Communication A 5873). 1 For the series of exports to be compared to that of settlements through the foreign exchange market, the basis for calculation considered is the total value of shipment carried out by a single group of companies classified within the Oilseeds and Grains sector. Even though such companies carry out most sales of products of the complex, the evolution does not necessarily match, exactly, that evidenced by exports at product level. 11 DJVEs are sworn statements to which exporters of products of an agricultural origin falling under the scope of Law 21453 are subject. They are daily published by the Ministry of Agribusiness (Minagro). In order to reflect foreign sales of products of an agricultural origin more accurately, DJVEs considered herein are adjusted taking also into account exports of biodiesel and soybean shells pellets, two products that do not require any DJVE. 12 This drop resulted from negative changes in amounts of 8% and positive changes in prices of 1%. Transactions in the Foreign Exchange Market BCRA 14

around US$ 3 million 13. Conversely, there were higher foreign sales of barley for around US$ 125 million, soybean oil for around US$ 11 million and biodiesel for around US$ 7 million 14. Chart III.3. Sales, Collections and Exports in the Oilseeds and Grains Sector Millions of US$ 6. 27.325 27.387 26.69-12% 23.942-3% 26.635-4% 25.489 5. Jan-16 to Dec-16 Jan-17 to Dec-17 4. 3. 2. -34% -11% -4% 11% 8% 1% -16% -25% 11% 65% -15% -15% 1% -16% 1% -12% 28% 54% 7% % -49% 5% 7% 16% 4% -7% -6% -6% 1% -2% -23% -23% 6% -21% -8% -28% 1. Dec-15 Mar-16 Jun-16 Sept-16 Dec-16 Mar-17 Jun-17 Sept-17 Dec-17 Sales (DJVE) Collections (MULC) Exports Source: National Institute of Statistics (INDEC) and the Minister of Agriculture. Sales (DJVE) include the exports of biodiesel and soybean shell pellets. Throughout 217, DJVEs evidenced a 12% drop in year-on-year terms vis-á-vis a fall of 3% and 4% in the settlements through the foreign exchange market and exports, respectively. The drop in DJVEs was mainly due to lower foreign sales of the soybean complex for around US$ 2.65 billion, followed by lower sales of corn for US$ 65 million, which were partially offset by higher sales of wheat for around US$ 4 million. Regarding domestic trading, the purchases of soybean at a set price 15 stood slightly above the level of the 215/16 cycle. Nevertheless, it is worth mentioning that both cycles were lagging considerably behind previous cycles. In order of magnitude, purchase agreements at an agreed-upon price covered, by the end of 217, 71% of the total estimated production for the 216/17 16 cycle, against the 76% observed in the same period for the average of the 212/13 to 214/15 cycles. On the other hand, corn and wheat exhibited a pace of domestic purchases by the export sector that continued breaking a historical record, a situation that mainly resulted from the significant growth in the production of these crops 17. 13 By the time this report was completed, wheat harvest progress for the 217/18 cycle was standing at 77 percentage points (p.p.) of coverage, down 8 p.p. against the figure of the previous cycle. Source: Ministry of Agribusiness. 14 Even though the US increased the tariffs on Argentine biodiesel (standing between 54.36% and 7.5%) as an anti-dumping measure in August 217 due to a claim by the National Biodiesel Board (NBB) related to an alleged subsidy, by the end of September the reduction of antidumping duties in Europe allowed to partially offset the loss of the US market. 15 It is important to highlight that the settlement of foreign currency is mainly related to the purchase of grains which will be later exported, either in the same condition or as processed products following industrial processes. 16 Estimate from the publication of the monthly report of December 217 by the Ministry of Agribusiness. 17 The considerable rise in production was due to the elimination of restrictions on exports and of exports duties. As a result, the domestic trading of wheat, by the closing date of this report, amounted to 12.9 million tons, against the 7.4 million tons traded in the same period of 216 (up Transactions in the Foreign Exchange Market BCRA 15

In turn, receipts from exports of goods from the remaining sectors totaled US$ 2.69 billion in December, down 8% against the same month of 216 (see Chart III.4). Chart III.4 Receipts from Goods Exports from the Remaining Sectors (excluding the Oilseeds and Grains sector) 1. 9 December 216: US$ 2.911 millions 8 7 13% December 217: US$ 2.689 millions y.o.y.: -8% 6 5 4 3 2 1 32% -12% -1% 12% -62% -4% -24% -1% % Foodstuff, Beverages and Tobacco Oil Chemical Manufacturing, Rubber and Plastic Mining Agriculture, Cattle Raise and Other Primary Production Activities Motor Vehicles Industry (Car Sales Stores and Automotive Spare Parts Stores) Textile Business and Leather Tanning Common Metals Manufacturing Machinery and Equipment Retail and Wholesale Business A sector-by-sector breakdown shows that the decrease was led by the Automobile Industry (down 62% y.o.y.), followed by drops in the remaining sectors except for the Food, Beverages and Tobacco, Oil and Agriculture, Livestock and Other Primary Activities sectors, which posted increases of 13%, 32% and 12%, respectively. III) a.1.2. Payment for Goods Imports Payments for goods imports on the exchange balance totaled US$ 4.23 billion in December 18, posting a level similar to that of December 216 (US$ 4.21 billion). As regards the distribution per sector, there was a widespread but slight rise in the payments for goods imports, except for the Automobile Industry, Chemical, Rubber and Plastic Industry and Energy sectors, which recorded year-on-year drops of 11%, 1% and 28%, respectively (see Chart III.5). 75%). As regards corn, total domestic purchases in late December 217 reached 25.7 million tons against the 18.9 million tons purchased in December 216 (up 36%). Consequently, in this respect, the domestic trading of both grains broke a new historical record. 18 In this sense, it is worth mentioning that this figure does not include the payment of imports made from accounts of residents abroad. Transactions in the Foreign Exchange Market BCRA 16

Chart III. 5 Payment for Goods Imports by Sector 1.2 1.1 1. 9 8-11% December 216: US$ 4.29 millions December 217: US$ 4.229 millions y.o.y.: +1% 7 6 5-1% 24% 1% 4 3 2 1-28% 2% 3% 9% 18% 87% Automobile Industry Chemical, rubber and plastics Industries Commerce Machinery and equipment Energy * Food, Other beverage and Manufacturing tobacco Textile and tanning industry Common metals and processing Phyisical persons *Energy: includes oil, electricity and gas. Based on these figures, the payment of imports throughout 217 evidenced a rise of 9% (US$ 4.58 billion) against the figures recorded in 216, with increases in the Automobile Sector, Commerce and Manufacture of Common Metals, which were slightly offset by the drops observed in the Energy and Chemical, Rubber and Plastic Industry sectors. The Automobile Industry, leading sector in terms of relevance in total payments for goods imports through the foreign exchange market, ended 217 with a rise of 15% in the payments accumulated throughout the year and an increase of 3% in the accumulated receipts from exports, against the figures recorded in 216. The increase of payments above the increase in collections deepened the foreign exchange deficit for goods, which totaled US$ 8.35 billion (up 25% against 216). This increase is in line with the 41% rise of sales from automotive terminals to car dealers selling imported vehicles, which exceeds the 1% rise in the exports of the sector (explained by a 29% hike in locally-produced utility vehicles and a 21% drop in locally-produced cars) 19. 19 Source: Association of Automobile Manufacturers (Adefa) Transactions in the Foreign Exchange Market BCRA 17

Chart III.6 Automobile Sector. Goods-Related Transfers 2. 1.75 1.5 1.25 1. 75 5 25-25 -5-75 -1. -1.25-1.5-1.75-2. Collections on goods exports Payments for goods imports Goods-related transfers -116-176 -147-218 -24-213 -178-132 -162-86 -58-321 -276-236 -285-248 -31-293 -37-374 -35-327 -287-346 -358-45 -541-51 -61-623 -574-651-63-62 -61-617 -71-75 -679-728 -693-671-673-773 -728-74 -875-827 Jan-14 May-14 Sept-14 Jan-15 May-15 Sept-15 Jan-16 May-16 Sept-16 Jan-17 May-17 Sept-17 - Total collections 216: US$ 5.216 M Total payments 216: US$ 11.891 M Total collectioncs 217: US$ 5.37 M Total payments 217: US$ 13.721 M In turn, the Energy sector recorded the lowest figure on record in terms of payments for imports since April 21, totaling US$ 25 million in December (28% y.o.y. drop). If we take into account the flows accumulated from January to December 217, a 1% y.o.y. drop is observed, mainly resulting from a decrease in payments for imports of the Electricity and Gas sector (see Chart III.7). Chart III.7 Payments for Goods Imports. "Energy" sector 2. 1.75 1.5 1.25 1. 75 5 25 1.79 1.63 816 1.484 1.651 1.369 1.26 1.242 96 Gas (Extraction, Transportation, Distribution) Electricity (Generation, Transportation, Distribution) Oil 1.83 833 751 531 462 728749 678 1.23 1.21 868 84 Total payments 216: US$ 6.273 M 453 489 52 59 439 48 366 664 955 863 562 472 393 348 292 Total payments 217: US$ 5.631 M 318 257 389 315 73 1.32 552 559 45 431 392 25 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Finally, upon analyzing outflows for goods imports on the exchange balance based on the method of payment used (see Chart III.8), advance payments went up 13% y.o.y. in December, while payments at sight and deferred payments went down 7% y.o.y. and 1% y.o.y, respectively. Transactions in the Foreign Exchange Market BCRA 18

Chart III.8 Payments for Goods Imports 8. 7. 6. Deferred Payments for Goods Imports Advanced Payments for Goods Imports (FOB) Spot Payments for Goods Imports (FOB) 4.29 +1% 4.229 5. 4. 3. 2. 1. F-2 F-3 F-4 F-5 F-6 F-7 F-8 F-9 F-1 F-11 F-12 F-13 F-14 F-15 F-16 F-17 III) a.2. Services, Primary Income and Secondary Income The year-on-year net outflows for services transactions increased by US$ 37 million and totaled US$ 891 million in December 217. This result was accounted for by net outflows for Travel, Passenger Transport and Other Expenses Paid with Credit Card for US$ 824 million 2, Freight and Insurance for US$ 8 million and Other Services for US$ 63 million, which were partially offset by net inflows from Business, Professional and Technical Services for US$ 76 million (see Chart III.9). 2 It is worth pointing out that the transfers made to foreign countries in order to settle the balances with international credit card issuers include both the purchases made by residents travelling abroad and the remote purchases made from foreign suppliers. In turn, the inflows include the remote purchases made with credit cards by non-residents from Argentine suppliers. Transactions in the Foreign Exchange Market BCRA 19

5 Chart III.9 Net inflows from services 25-25 -5-75 -695-635 -421-584 -1. -891-1.25 Tourism, Travels and Tickets Freight and Insurance Services Business, Professional and Technical Services Other Services Net Inflows -1.5 E-13 M-13 S-13 E-14 M-14 S-14 E-15 M-15 S-15 E-16 M-16 S-16 E-17 M-17 S-17 In December, the net deficit of the Travel, Passenger Transport, and Other Expenses Paid with Credit Card account posted an 11% y.o.y. hike, basically explained by a rise in outflows in absolute terms that exceeded the increase in inflows (see Chart III.1). Indeed, gross inflows totaled US$ 25 million (9% change), while gross outflows amounted to US$ 1.3 billion (1% change). Throughout 217, there was a deficit of US$ 1.66 billion for this heading while, in 216, the outflow accounted for US$ 8.54 billion, resulting in a 25% increase during 217. This change is in line with the results of the International Tourism Survey (ETI) 21, made by the Ministry of Tourism jointly with the National Institute of Statistics and Censuses (INDEC), where a rise in net outflows of tourists was observed in the January-November period. 21 https://www.indec.gov.ar/uploads/informesdeprensa/eti_1_18.pdf Transactions in the Foreign Exchange Market BCRA 2

Chart III.1. Services. Travel, Passenger Transport, and Other Expenses Paid with Credit Card 5 3 1-1 -3-5 -7-9 -1.1-1.3-1.5 Tourism, Travels and Tickets - Incomes Tourism, Travels and Tickets - Outflows Tourism, Travels and Tickets - Net In turn, in December, transactions related to primary income recorded a net outflow of US$ 1.12 billion; this total is made up by net payments for Interest totaling US$ 823 million, and for Profits, Dividends and other Income for US$ 295 million. If we add these totals, in year-to-date terms, both headings recorded year-onyear drops of 3% in terms of net outflows and ended the year with a total of US$ 8.44 billion and US$ 2.17 billion, respectively. Regarding payments for interest, in December, the disbursements of Public Sector and BCRA accounted for almost 95% of net payments, reaching a total of US$ 779 million. Within this sector, the payments related to the service of government securities of the Discount Bond and the International Bond Due 2117 stood out. In turn, the gross transfers of profits and dividends through the foreign exchange market totaled US$ 238 million (see Chart III.11), evidencing a 31% drop against December 216. On a sector-by-sector basis, the payments made by Transport for US$ 64 million, Insurance for US$ 5 million, and Chemical, Rubber and Plastic Industries, for US$ 36 million, are to be noted (see Chart III.12). Throughout 217, transfers of profits and dividends totaled US$ 2.13 billion, down US$ 871 million against the figure recorded in the same period of 216 (29% drop). Transactions in the Foreign Exchange Market BCRA 21

Chart III.11 Transfer of Profits and Dividends Chart III.12 December 217 Total: US$ 283 millons 1.2 1. 8 6 4 Total annual 4.23 4.495 253 1.344 1.316 1 2.996 2.125 Insurance Companies 5 Chemical Manufacturin g, Rubber and Plastic 36 Non-Metallic Mineral Products (Cement, Ceramics and Others) 29 Agriculture, Cattle Raise and Other Primary Production Activities 29 Oil 2 2 Jan-1 Oct-1 Jul-11 Apr-12 Jan-13 Oct-13 Jul-14 Apr-15 Jan-16 Oct-16 Jul-17 Transportatio n 64 Others 56 III) b. Foreign Exchange Capital and Financial Account The transactions of the foreign exchange capital and financial account on the exchange balance recorded a positive balance of US$ 1.17 billion in December. This surplus is associated with the net inflows recorded by the Public Sector and the BCRA for US$ 2.75 billion and by the Financial Sector for US$ 289 million. These movements were partially offset by the net outflows of the Non-Financial Private Sector for US$ 1.22 billion and the negative result of the Other Net Movements account for US$ 642 million, mainly due to the withdrawal of own funds of institutions deposited in their accounts with the BCRA. Foreign Exchange Capital and Financial Account In millon dollars Date Dec-16 Total 216 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sept-17 Oct-17 Nov-17 Dec-17 Total 217 Foreign Exchange Capital and Financial Account 3.454 29.885 8.31 4.539 765-1.5-1.28 3.324-316 2.137 2.599 3.331 4.75 1.174 28.5 Financial sector 1.131-3.55-1.984-874 -61-55 -78 27-1.96-1.84-1 -566-645 -1.221-9.68 Non-Financial Private Sector 681-2.41 966 773-27 -1.817 654-1.163-13 -566-291 36-337 289-1.345 Public Sector and BCRA 685 24.922 8.184 3.25 1.458-2.842 365 6.78 584 3.982 2.318 2.664 3.487 2.748 32.276 Other Net Movements 957 1.418 864 1.39-56 3.664-1.519-1.618 326 525 574 927 2.246-642 6.682 Throughout 217, transactions of the capital and financial account on the exchange balance recorded a positive result of US$ 28.1 billion, posting a reduction against the account total observed in 216 for US$ 1.88 billion. III) b.1. Non-Financial Private Sector s Foreign Exchange Capital and Financial Account In December, the capital and financial account of the Non-Financial Private Sector (SPNF) exhibited net outflows for US$ 1.22 billion, posting a drop of US$ 2.35 billion against the same month of 216 (see Chart III.13). The main reason behind this change was the US$ 4.75 billion reversal of the stock resulting from the purchase of foreign assets due to the effect caused, in December 216, by the extraordinary inflows from the payment of tax debts within the framework of the tax amnesty promoted by the national government, a situation that conditions the year-on-year comparison. This change was partially offset by the reversal observed in the Transactions in the Foreign Exchange Market BCRA 22

purchase-sale securities transactions 22 by the institutions in the secondary market as well as in the portfolio investments by nonresidents for US$ 1.6 billion and US$ 78 million, respectively. Chart III.13 Non-Financial Private Sector s Capital and Financial Account December 216 December 217 2.15 1.131 873 1.41 5 116 2 6 96-193 -813-869 -1.221 Capital account Investments by non-residents Loans and debt securities Foreign assets Swap transfers from abroad Securities -2.737 Total Net purchases of foreign assets totaled US$ 2.74 billion in December, mainly due to net purchases of banknotes for US$ 2.44 billion (see Chart III.14) and of foreign currency for US$ 296 million. It is important to highlight that part of the abovementioned net purchases of banknotes correlates with the increase of domestic deposits in savings accounts in foreign currency. 22 In the foreign exchange market, transactions are recorded under the name of the institution. The net effect of these transactions has, as counterpart, non-financial private sector s residents, or non-residents. For this reason, they are posted in the foreign exchange capital and financial account of the non-financial private sector. Transactions in the Foreign Exchange Market BCRA 23

Chart III.14 Transactions of Banknotes in Foreign Currency by the Non-Financial Private Sector through the FOREX 2. 1. -1. -2. Net purchases of Banknotes -3. Sales of banknotes Purchases of Banknotes -4. Feb.-2 Feb.-3 Feb.-4 Feb.-5 Feb.-6 Feb.-7 Feb.-8 Feb.-9 Feb.-1 Feb.-11 Feb.-12 Feb.-13 Feb.-14 Feb.-15 Feb.-16 Feb.-17 * Excludes operations with specific destination prior to 12.17.15 In gross terms, purchases of banknotes totaled US$ 3.9 billion and went up by US$ 1.18 billion against the figure recorded in November. After reductions for three months in a row, there was an increase in the amount of clients purchasing banknotes up to a total of 1,4, clients by the end of December (see Chart III.15). Throughout 217, around 3,6, clients bought foreign currency banknotes through the foreign exchange market. 1.1. Chart III.15 Foreign Assets Transactions with Banknotes Number of customers each month 1.. 9. Purchases of Banknotes Sales of banknotes 8. 7. 6. 5. 4. 3. 2. 1. - Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 If the information is broken down to take into account the amount of monthly purchases by client, it is seen that 37% of banknote purchases (around US$ 1.45 billion) were made for amounts up to US$ 1, per month by client, and their share contracted by 1 percentage point against November (see Chart III.16). In Transactions in the Foreign Exchange Market BCRA 24

addition, 96% of the number of clients who purchased banknotes in December made transactions in this amount segment, resulting in an average purchase by client for the sum of US$ 1,449 within this segment, whereas the remaining 4% made purchases for US$ 59,561 on average. In turn, the monthly sales of clients banknotes totaled US$ 1.46 billion in December, standing slightly above the figures of November. It was observed that sales of banknotes over US$ 2 million accounted for 31% of the total, the lowest level recorded since March 217 (see Chart III.17). Chart III.16. Purchase of Banknotes by SPNF- Stratified Share by stratum - strata defined by monthly cumulative per customer 1% 9% 8% 7% 6% 5% 4% 3% 2% 13% 16% 12% 11% 8% 7% 7% 15% 15% 3% 5% 4% 16% 17% 17% 15% 16% 16% 17% 22% 2% 21% 19% 19% 19% 19% 19% 21% 5% 7% 9% 6% 1% 6% 9% 15% 5% 3% 2% 3% 4% 7% 7% 7% 7% 17% 18% 18% 19% 2% 5% 48% 5% 53% 53% 53% 55% 49% 46% 45% 45% 41% 49% 47% 42% 47% 4% 6% 21% 4% 3% 5% 6% 16% 16% 2% 19% 3% 5% 16% 18% 4% 6% 19% 2% 3% 3% 6% 6% 7% 8% 14% 1% 14% 3% 3% 4% 5% 5% 5% 6% 4% 6% 3% 3% 5% 6% 2% 2% 19% 26% 24% 17% 18% 2% 2% 18% 18% 16% 16% 4% 44% 47% 42% 41% 41% 38% 37% Chart III.17. Sale of Banknotes by SPNF- Stratified Share by stratum - strata defined by monthly cumulative per customer 4% 3% 6% 8% 8% 3% 8% 13% 8% 14% 17% 14% 17% 17% 11% 19% 16% 14% 19% 16% 43% 47% 41% 35% 18% 9% 1% 19% 15% 8% 8% 13% 1% 11% 1% 11% 9% 19% 2% 12% 17% 17% 17% 15% 35% 9% 8% 13% 11% 25% 3% 19% 11% 17% 18% 31% 14% 7% 8% 9% 15% 7% 12% 18% 27% 21% 31% 13% 11% 15% 12% 1% 13% 16% 13% 8% 9% 17% 15% 41% 45% 45% 33% 9% 7% 5% 9% 7% 8% 13% 14% 15% 1% 1% 4% 35% 28% 8% 7% 7% 1% 17% 15% 16% 1% 11% 11% 13% 11% 12% 9% 1% 9% 26% 22% 1% 11% 14% 17% 19% 21% 14% 14% 15% 1% % Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 More than US$ 5 M Between US$ 2 M and US$ 5 M Between US$ 5 K and US$ 2 M Between US$ 5 K and US$ 5 K Between US$ 1 K and US$ 5 K Up to US$ 1 K 29% 34% 34% 33% 24% 26% 21% 24% 27% 2% 18% 13% 16% 15% 18% 19% 21% 22% 21% 19% Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 More than US$ 5 M Between US$ 2 M and US$ 5 M Between US$ 5 K and US$ 2 M Between US$ 5 K and US$ 5 K Between US$ 1 K and US$ 5 K Up to US$ 1 K Unlike the situation of the previous three months, both natural and legal persons were net purchasers of banknotes in the market with monthly totals of US$ 2.16 billion and US$ 279 million, respectively (see Chart III.18). Chart III.18. Net Purchases of Banknotes Broken Down by Natural and Legal Persons Net purchases of banknotes by natural persons 25 279 Net purchase of banknotes by legal persons 296 97 261 213 21 185 1.239 1.25 753 182 953 71 13 624 636 121 136 84 57 869 88 935 897 812 977 78 1.6471.628 1.465 1.221 1.1731.84 1.171 1.932 2.266 1.611 1.4531.398 2.162-15 -14-33 -38-458 -213-68 -141-29 Dec-15 Feb-16 Apr-16 Jun-16 Ago-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Net purchases of assets for transfers abroad, known as foreign currency transactions, totaled US$ 296 million in December (see Chart III.19), reaching the lowest level of net outflows of the last seven months. This total implied a reversal of US$ 4.25 billion against the value observed in the same month of 216 due to the extraordinary inflows resulting from the payment of tax debts within the framework of the tax amnesty promoted by the National Government. Transactions in the Foreign Exchange Market BCRA 25