Argentina announced a new preferential exchange rate dubbed the “agro dollar,” which aims to boost agricultural exports and strengthen international reserve accumulation. The preferential exchange rate of 300 pesos per dollar will run from April 8 through May 31 for soybeans and soy products and there will also be tax benefits to favor small regional producers affected by the country’s ongoing drought. The boosted exchange rate will last until Aug. 30 for “regional economies,” which include producers of products such as yerba mate, wines, citrus and wood. It doesn’t appear the boosted exchange rate applies to corn or wheat sales.
Argentina expects the new policy to spur $15 billion in exports during the second and third quarters of the year. Prior “soy dollar” preferential exchange rates triggered strong soybean sales by farmers and exports, though that was before the country was saddled with extreme drought.
Economy Minister Sergio Massa also announced a decree enacting sanctions for the businesses that don’t comply with the 180-day deadline to liquidate their export income in pesos in Argentina. The sanctions will include a suspension of their permits to do business if they fail to liquidate before a deadline that will be set in the executive order.
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