Argentina’s government devalued its currency by nearly 18% on Monday while the benchmark interest rate was raised by 21 percentage points to 118%. President Alberto Fernandez’s administration had been striving to maintain a stable exchange rate, but after a substantial loss in a crucial primary election on Sunday, it conceded. The 18% devaluation pushed the official peso rate to 350 per U.S. dollar, up from 287 last Friday.
An Argentine agribusiness source told us, “After the Sunday’s shock, yesterday was a very quiet day in terms of selling, because nobody knows if the decree will be derogated or not. For sure, this situation is not favorable for farmers. The ‘agro-dollar’ exchange rate is 340 pesos per dollar against the new exchange rate of 350 pesos.
“Farmers sold almost 8 MMT of corn during this agro-dollar campaign, only 500,000 MT of soybeans and 500,000 MT of sunflower. In my humble opinion, farmers will hold their crops as much they can before the early corn planting. On the other hand, there is not a very good start in terms of weather and the forecast still doesn’t show enough rains to recover soil moisture.” More from Pro Farmer.
