Economy Minister Sergio Massa has announced a new exchange rate, called the “agro dollar,” which aims to boost agricultural exports and strengthen international reserve accumulation.
“The drought struck us very hard, the International Monetary Fund (IMF) and everyone who understands the weight the agricultural exports have in our economy assumes that,” said Massa in a meeting with the press in Washington.
He said the new preferential exchange rate would start in April and seek to “simplify” the various exchange rates at which products and services are exported.
The “agro dollar” will operate for 30 days for soybean exporters and 90 days for regional economies. The measure will be formally announced this Monday, once the details are ironed out. The government hopes it will allow them to collect some US$15 billion during the second and third quarters of the year.
Massa launched two temporary preferential exchange rates, exclusively for soybean exporters, in September and November of last year. They were around 30% above the official exchange rate.
“The same way we took measures to protect and help producers that were victims of the drought with tax benefits, we also will take measures to promote exports and consolidate the agricultural sector,” Massa said.
He added that the purpose of these measures is to strengthen international reserves in the second quarter, and “to continue the path of stabilization that Argentina has to go through.” The government is currently experiencing a severe international reserve shortage: in March alone, the Central Bank sold US$1.79 billion. It lost some US$2.86 billion in the first three months of 2023.
The Minister also said that another challenge is “currency simplification”, so that “everything that appears under different dollar names starts to operate under a more unified scheme.” Currently, there are approximately 17 different US dollar exchange rates, including the “Netflix dollar”, “Qatar dollar,” and “Coldplay dollar”.
After meeting with the press, Massa announced a “specific bilateral agreement with the United States” with the goal of “continuing to organize and regularize international financial relations.” However, no further details were given.