Argentina extends soy export incentives to shore up foreign reserves
03.10.2023 (Hellenic Shipping News) - Argentina’s government said on Monday it will extend a program to incentivize grains exports in a push to shore up the country’s meager foreign reserves, as it looks to meet targets set by the International Monetary Fund amid an economic crisis.
“It is necessary to continue implementing policies that tend to strengthen the reserves of Argentina’s central bank,” said a decree published in the official gazette, extending the export increase program, which launched on Sept. 4, to Oct. 25.
Under the program, Argentine agro-export firms can swap 25% of the foreign currency they make on alternative exchange markets that offer better rates that the official rate, which in August was frozen at 350 pesos per dollar.
The remaining 75% must be exchanged at the official rate.
The government hopes that the better rates will continue to drive higher domestic prices for soybeans and more commercial transactions, shoring up foreign reserves with income from more agricultural exports.
Argentina, one of the world’s top exporters of soybean oil and meal, has also allowed its oil sector to access more favorable exchange rates.
This comes as the South American country battles triple-digit inflation and a looming recession as it looks to salvage a $44 billion loan deal even as Argentines prepare to head to the polls this month to elect their next president.
Sergio Massa, current economy minister and candidate for the ruling Peronist coalition, will compete against former security minister Patricia Bullrich and ultra-liberal Javier Milei, who is leading the polls.
Source: Reuters (Reporting by Maximilian Heath; Writing by Sarah Morland; Editing by Alison Williams)