MercoPress. South Atlantic News Agency

Uruguayan exporters worried about falling US dollar

The US dollar needs to be 13% higher, according to Uruguayan finance circles

The Uruguayan Exporters Union (UEU) Monday expressed its concern about the current parity between the local currency and the US dollar which was in its view affecting foreign trade.

 The UEU said it was “necessary to modify the course of monetary policy” due to the sharp fall in the exchange rate because in 2022 Uruguay “has been an atypical case in the world due to the strong fall of the US currency, which last Friday reached the lowest level in 34 months” after an 11% drop in 10 months.

In this scenario, Uruguayan exports lose “competitiveness against customers and competitors,” the UEU argued while insisting that the international context had changed compared to the first half of the year since “international prices have dropped and inflation in Uruguay has started to ease.”

Hence, it is ”necessary to modify the course of the monetary policy that the Central Bank of Uruguay (BCU) has been carrying out,“ the UEU insisted, because ”exports are a fundamental engine for the Uruguayan economy.“

”An export sector that is not competitive is a sector that does not invest, does not grow, and does not generate employment. We hope that the authorities understand the seriousness of the situation and act accordingly,” the UEU also pointed out in a statement.

Last week, Uruguay's Rural Federation also reported that the lagging exchange rate was taking its toll on employment, investment, and competitiveness. In their view, the US dollar is overpriced by 13%, which has been reportedly admitted by some officials of President Luis Lacalle Pou's administration.

Livestock Minister Fernando Mattos has reportedly explained that the strengthening of the Uruguayan peso against the dollar was due to record exports of over US$ 10 billion generating a downward pressure on the currency, which in turn is added to the high levels of investment in Uruguay.