The Government will implement a new exchange rate to accelerate exports from the agro-industrial sector. The so-called “agro dollar” will amplify the sectors that will benefit from compensation for exports, and soybeans, which in previous editions was the main source of income and star of the sector, will have a limited participation in the three months that the resolution will be activated.
Minister Sergio Massa, on a tour of the United States, was in charge of announcing it. “The challenge is to promote this measure to strengthen reserves in the second quarter and continue the path of stabilization that Argentina has to follow”, he maintained, in statements to the press that covers his stay in the US.
According to sources from the Ministry of Economy consulted by PROFIL, “The agricultural dollar is an export increase program that intends in some way to facilitate in the year of drought the capacity and the fulfillment of the contracts of the exporters, understanding the difficulties that our producers suffered”.
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The novelty has as antecedent the negotiation with the International Monetary Fund. In addition to approving the goals and allowing the country to have the disbursement of US$ 5.200 million committed, the staff of the IMF gave him the green light to apply a new differential recognition for exports, in order to be able to add dollars to the reserves of the Central Bank, through the productive channel.
“The drought hit us very hard, It is assumed by the IMF and all those who understand the weight of the agro-export sector in the Argentine economy, and we believe that just as we took measures to protect and help producers who were victims of the drought with tax benefits, we also took measures to promote exports and consolidate the agricultural sector in the possibility of fulfilling its contracts, and the Argentine Central Bank in the possibility of strengthening itself in terms of reserves”, said a source from the economic team.
From Washington, the same official pointed out that “the second great challenge is to begin to follow a path of exchange simplification so that all that appears under different dollar denominations begins to work and operate in a more unified scheme”.
Since his arrival at the Palacio de Hacienda, Massa managed to unlock several credits from international organizations and accelerated the settlement of farm currencies with the first two editions of the dollar-soybean. Faced with the drought crisis, a third edition was going to add few dollars, although in the field they expected a nod to access an export benefit, in the midst of the productive drop due to the climate impact.
As far as was known so far, there will be several subsectors that will benefit from the “dollar-agro”, including peanuts, rice and wine. The latter was waiting for the announcement, after the promise that Massa had left during his time at the Mendoza Harvest. Those exchange rates will last for three months and start next week. Within this framework, the dollar-soybean will have a 30-day window to settle at a differentiated dollar. As reported, the liquidation value will be around $300.
IMF thumbs up
The approval of the IMF was key, because the way to increase the meager reserves of the BCRA, via the productive channel, was with a benefit that will imply a new monetary issue. That variable is restricted by the new US$45 billion debt repayment agreement that Massa reached a short time ago. But the Fund again made its claims more flexible, with the aim of avoiding breaking the understanding and pushing Argentina to default.
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Massa had already achieved, through the financial channel, contribute international currencies to the Central Bank thanks to loans and swaps of currencies that were intended to support the reserves of the Central Bank. Within this framework, it signed an agreement with the United States for the refinancing of the debt that Argentina maintains with the group of creditor countries. It was during a meeting at the State Department, with the Undersecretary of Economic Development, Energy and Environment, José W. Fernández.
Signals for the market and fall in reserves
For these hours, the economic team is working on the fine line of the scope of the measure, which will be presented next Monday, as this medium learned. The haste of the head of the Palacio de Hacienda in making it public is send concrete signals to the market, in order to avoid a price run due to a jump in the exchange rate gap between the official dollar and the alternative ones, which further complicates the inflationary rhythm.
It happens that the operators and investors multiplied the expectations of devaluation during the last days before the shortage of dollars in the reserves of the Central Bank, which today they drilled the floor of US$ 1,000 million, after the BCRA should assist the market with sales for US$76 million, and an accumulated amount of almost US$1,800 million in the month, in the absence of a conference for the end of March.
LM
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