Companies paid US$2.6 billion in dividends abroad in the first half of the year

In the first half of this year, multinational companies operating in Argentina have sent approximately $2.6 billion in dividends abroad, marking a significant shift in economic policy and financial strategy. This figure reflects not just a return to a previously restricted practice but also surpasses the amounts recorded during the same period in 2016, when former President Mauricio Macri removed exchange controls, as well as the figures for 2017, 2018, and 2019. The data was presented by Vladimir Werning, vice president of the Argentine Central Bank (BCRA), during a presentation at the Fundación Mediterránea in Córdoba.

The release of these dividends forms part of the official strategy aimed at demonstrating that the normalization of exchange rates can proceed without generating tensions in the foreign exchange market. According to Werning, the current purchases of dollars by the BCRA occur under significantly different conditions compared to previous years, where companies had more freedom to pay for imports, settle commercial debt, and distribute profits, even though international prices for major agricultural products remain below historical levels. He noted that accumulated transfers amount to $2.6 billion, while payments related to Bopreal helped resolve about half of the private commercial debt inherited from late 2023.

Werning emphasized that the process of currency normalization is progressing alongside the cleanup of private commercial debt. Following the removal of the exchange control implemented by Macri in December 2015, companies began sending retained earnings overseas. That year, transfers reached $2.9 billion; they then declined to $2.2 billion in 2017, $1.9 billion in 2018, and $852 million in 2019. The $2.6 billion transferred in just the first half of this year already represents nearly 90% of all transfers made in 2016 and exceeds the figures recorded during the first six months of each of those years.

However, the government argues that this phenomenon should not be interpreted as a permanent increase in the demand for foreign currency but rather as the unwinding of a stock accumulated during years of exchange restrictions. This explanation was also given recently by Santiago Bausili, president of the BCRA, defending the decision to allow the transfer of dividends corresponding to gains obtained in 2025. Although the regulation might appear restrictive because it only permits distributing profits from the last fiscal year, in practice, it allows many companies to clear a substantial portion of the dividends held back during the exchange controls.

Bausili explained that although the rule seems restrictive, allowing the distribution of 100% of the profits from one year equates, for many companies, to releasing several accumulated years' worth of dividends. For instance, he noted that in industries where the average distribution rate is around 25%, such as the food industry, allowing full distribution of 2025's profits would effectively free up four years' worth of dividends.

According to official data available up to May, oil and gas companies led the transfers, sending $732 million abroad, followed by mining firms ($322 million), companies in the oilseed and cereal sectors ($176 million), food companies ($161 million), chemical companies ($160 million), and transportation firms ($105 million). Starting in May, international banks also began their initial distributions of dividends after the Financial Entities Supervisory Authority authorized the sending of a portion of the profits earned in 2025.

For the government, the sharp rise in dividend transfers does not contradict the strategy of accumulating reserves but is instead part of the broader process of currency normalization. While freeing up flows that had been restricted for six years, the Central Bank is simultaneously trying to strengthen its capacity to handle potential episodes of volatility in the dollar. During the same presentation, Werning stated that the institution is working to rebuild a "firepower" exceeding $20 billion, combining reserve purchases, futures margin, bilateral swaps, and refinancing of repos.