MercoPress. South Atlantic News Agency

Argentina to launch “agro dollar” exchange rate

Agro dollar will be in effect for 30 to 90 days, it was reported in Washington DC, where Massa was on an official mission to the International Monetary Fund (IMF).

Argentine Economy Minister Sergio Massa Thursday announced the creation of the so-called “agro dollar,” a new exchange rate for agrifood exports, which seeks to help replenish the country's impoverished coffers while simplifying foreign currency operations for all rural producers.

 The “agricultural dollar” intends to simplify the exchange rates for products of the agro-export sector, it was explained. It will also seek to simplify the exchange rates used to import products and services, such as the so-called “tourist”, “Coldplay”, “Qatar”, “Techno” and other quotations.

The new rate, also dubbed “soybean dollar 3″ will be in force in April but the exact figures are still being finalized. Then it will be applied as of May to regional economies for 90 days, benefitting fruit, peanuts, rice, and wine producers. The measure also seeks to support the expansion of planted areas through the Export Increase Fund.

The agro dollar is expected to stand at between AR$ 280 and AR$ 300, it was reported. The Government expects to reach a liquidation of US$ 15 billion between the second and third quarters of the year.

The more encompassing agro dollar stems from past experiences with the soybean dollar, which left other sectors, such as dairy and beef cattle farming unattended despite growing prices in animal feeds.

”The dollar agro is a program of export increase that aims to somehow facilitate in the year of drought the capacity and compliance with the contracts of exporters understanding the difficulties suffered by our producers. The challenge is to promote this measure to strengthen the reserves in the second quarter and continue the stabilization path that Argentina has to follow,“ Massa said.

Massa also explained that ”the second great challenge is to start going down a path of exchange simplification so that everything that appears under different dollar denominations starts to work and operate in a more unified scheme.“

”The drought hit us very hard, the IMF and all those who understand the weight that the agro-export sector has in the Argentine economy assume it, and we believe that just as we took measures to protect and help with tax benefits the producers who were victims of the drought, we also took measures to promote exports and consolidate the agro sector in the possibility of fulfilling its contracts, and the Argentine Central Bank in the possibility of strengthening its reserves,” he added.