The Government published this Monday two decrees in the Official Gazette to put into effect the new edition of the Export Increase Program. One of the most outstanding points is article 17, an important piece of information for producers.
The Government published this Monday two decrees in the Official bulletin to put into effect the new edition of the Export Increase Program. One of the most important points for exporters is the price of the dollar, which was set at $300. The second has to do with article 17 of DNU 194/2022 where it is indicated that the settlements will be charged in “linked dollar” accounts that are updated according to the official dollar.
Specifically, the aforementioned article says the following: “the Central Bank of the Argentine Republic will implement the necessary mechanisms so that the result of any foreign currency settlement that takes place within the framework of this Program is credited in a special account whose remuneration is determined based on the evolution of the reference exchange rate of Communication A 3500 of the BCRA, within the terms and conditions established by the complementary regulations of said institution”.
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But what does it imply? In principle, these accounts have a variable remuneration based on the evolution of the A3500 exchange rate, which is the method for calculating and updating the wholesale dollar. According to the Survey of Market Expectations (REM), las and REM analysts forecast the average nominal official exchange rate of $215 per dollar for April 2023 (6.0% expected monthly variation) and those who more accurately predicted this variable in the short term they projected that the average nominal official exchange rate for the same period is located at $215.19 per dollar (6.1% monthly variation).
The objective of this measure is to prevent exporters from going to the MEP dollar, which is trading at around $400, a 32% gap between the exchange rate offered by the Government and the parallel exchange rate. In this way, it seeks to discourage dollarization in an election year where this is very likely to occur.
Bonus track: the letter to 10 years
In the case of regional economies, they will also have a differential rate of $300 but until August 31, 2023, inclusive.
At the same time, A part of the collection obtained through withholdings will be used to finance Programs whose purpose is to attend to the negative effects of the drought.
The striking thing has to do with the 10-year letter in which mention is made in the same decree. This new edition of the agricultural dollar, which includes sectors other than soybeans, will be financed with a 10-year bill.
Meanwhile, article 19, authorizes the Ministry of Economy, before the end of the current calendar year, to issue a BILL denominated in UNITED STATES DOLLARS (US$), for TEN (10) years, which will accrue an interest rate equal to the that accrue the international reserves of the CENTRAL BANK OF THE ARGENTINE REPUBLIC for the same period and whose interests will be canceled semi-annually, for the patrimonial difference that the performance of the operations of this decree has generated for the CENTRAL BANK OF THE ARGENTINE REPUBLIC.
Source: Ambito
