Definition
International reserves represent the stock of foreign currency assets held by the central bank. They serve as a buffer for financial stability, allow intervention in the foreign exchange market, and act as a signal of macroeconomic solvency to investors and international institutions.
Analysis
Between 2018 and 2019, reserves experienced sharp declines driven by exchange rate tensions, capital outflows, and the need to intervene to contain peso volatility. The combination of political uncertainty and macroeconomic deterioration significantly reduced available reserve buffers.
Between 2020 and 2022, reserves remained under pressure due to capital controls, weaker net foreign currency inflows, and external payments, although with occasional episodes of partial rebuilding linked to extraordinary export settlements or multilateral financing.
In 2023, the situation worsened: a severe drought sharply reduced agribusiness exports, the central bank lost intervention capacity, and net reserves turned negative, pushing total reserves to multi-year lows.
Starting in 2024, a phase of moderate recovery began. Fiscal adjustment, improved macroeconomic discipline, and a more stable exchange rate framework reduced market pressures. From 2025 onward, reserves show a clearer improvement, driven by higher foreign currency inflows and a reduced need for intervention, although they remain low and vulnerable to external shocks.