Argentina's government is considering a special, temporary exchange rate for soy exporters in September in a bid to boost its dollar holdings and cash reserves at the Central Bank.
Ciara-Cec, the country’s crushing and export chamber, sent a note to members that said the government “is evaluating to implement a special and extraordinary currency liquidation regimen for the month of September,” according to a message obtained by Bloomberg News.
The Economy Ministry didn’t respond to a request for comment, while the Agriculture Secretariat declined to comment. A spokesman at the export group Ciara-Cec pointed to a Twitter statement that said the government has not yet confirmed any decisions.
According to the note, the government is planning to offer an exchange rate of 200 pesos per dollar for exports of soy and its byproducts, considerably more than the official exchange rate today at 138.7 per dollar. The government’s export taxes on soy products are a key source of its tax revenue and dollar income.
Economy Minister Sergio Massa is seeking to create incentives for exporters who have held back soy shipments to send more product abroad as he aims to build the Central Bank’s cash reserves. A previous measure failed to draw significant sales. Dwindling reserves have fuelled concerns about a possible currency devaluation, something the government denies it will do.
The government expects to bring in US$5 billion through this measure, the chamber said in the note. While the measure will likely encourage sales, that number is too optimistic, according to a person with direct knowledge of the matter.
by Patrick Gillespie & Ignacio Olivera Doll, Bloomberg