Argentina Boosts Its Soy Export In A Bid To Defuse Economic Trouble

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Argentina Boosts Its Soy Export In A Bid To Defuse Economic Trouble

Argentina Boosts Its Soy Export In A Bid To Defuse Economic Timebomb

Argentina has adopted a preferential exchange rate dubbed 'Soy Dollar' in an attempt to boost grain exports. According to experts, this will help the country to earn foreign currency & to gain temporary breathing room.

The new exchange rate measures will allow soy exporters to earn money when they bring their foreign reserves back to the country. So far, Argentina is planning to export $15 billion (USD) worth of soy during Q2 & Q3 2023.

Argentina is hopeful that its exchange rate measures will allow it to fill its foreign exchange reserves, which are almost depleted for now.

Soy Dollar Exchange Rate Will Provide Temporary Relief

According to one economist, policy in Argentina will accelerate the speed of foreign reserves coming into the country. So in a sense, it will provide temporary relief to the country!

In October, the country is scheduled to head into the general elections, and the ruling coalition party has a very high chance of defeat.

In addition, Argentina was also hit with a drought last year that had a major effect on its grain production. Considering how Argentina's top export is grains, it was a major blow to the country's economy.

As a result, the central bank of Argentina has fewer dollars in its reserve while the foreign debt obligations and imports remain the same or even elevated in some cases.

And not to mention that the inflation rate in Argentina is already above 100% while the poverty rate is standing at 40%. That's why it appears that Argentina's government is only trying to buy time, but it will not work for much longer!

For now, the country is working with IMF and has a loan program worth $44 billion. But even that has come under strain as the IMF has lowered Argentina's foreign reserves targets.

That's why for now, all the bets are now on the soy exports and the dollars they will bring to the country.

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