Drain of foreign exchange and government external debt. The balance of payments of Argentina. 1992-2018.

Abstract

In the decade of 2000, as a result of an important growth of foreign exchange reserves -provoked by trade balance- and Argentina's government external debt renegotiation context, the necessity of drawing upon a new indebtment process as a financing source seemed to be disappeared. Nevertheless, the debate reappeared at the beginning of the next decade, with the consolidation of a new phase of public debt contraction in 2016. In this context, this article examines the general role that Public and Private Sector have played in terms of contribution to the inflow/drain of foreign exchange along the unit of the period 1992-first semester of 2018, identifying relevant stages. The main result of the analysis is that government external debt growth (beyond its own needs) has sustained not only the accumulation of foreign exchange reserves but also the Private Sector Balance of Payments deficit, as had happened (although with a lower intensity) during the currency board regime.