Incentives created last week for Argentine soybean exporters to sell their crops are having the desired effect, according to the latest trade data. Fifteen percent of this year’s 44 million-ton harvest was sold in the first seven days since the scheme was implemented, says a report from the Rosario grains exchange.
Economy Minister Sergio Massa announced a one-month special exchange rate for soybean sales throughout September, around ARS 200 : USD 1, much more convenient than the official ARS 143 : USD 1 at which grain holders were refusing to sell, fearing an upcoming devaluation.
The measure put a short-term stop on the drainage of Argentina’s Central Bank foreign currency reserves, which are needed to finance imports and pay back Argentina’s international creditors, although questions remain about what will happen after the one-month window ends.
While the devaluation of the Argentine Peso would ease the country’s foreign trade imbalances, Vice President Cristina Kirchner has done everything in her power to stop it, including the creation of a complex multiple exchange rate system which means the national currency can be worth between ARS 100 and ARS 300 against the dollar depending on how it is transacted.