Lacalle Pou recognized the exchange rate delay and the lack of tools to reverse it

Lacalle Pou recognized the exchange rate delay and the lack of tools to reverse it
September 8, 2023 – 2:44 p.m.

The president spoke with the Rural Association of Uruguay about the dollar and the loss of competitiveness, and hoped that the dollar “was closer to $40.”

President Luis Lacalle Pou recognized the exchange rate delay that is experienced in Uruguay and that strongly affects the agriculture and export sectors due to the loss of competitiveness; and assured that the government is “doing everything possible” to correct the misalignment of the exchange rate.

After a meeting with the directors of the Rural Association of Uruguay (ARU) and within the framework of the opening day of Expo Prado, President Luis Lacalle Pou He spoke with the Valor Added program on Radio Carve about the economic news of the country and, particularly, the national agriculture.

According to the head of state, the meeting with the ARU was “very good, although we did not always agree on everything.” In that line, the dollar theme was one of those that was put on the table, an issue in which he considered that the country should be seen as integrated, although he also recognized that it affects a fundamental sector, which also adds “to the drought, to the poor harvest soy, cattle prices that they are not the best.” This “generates a loss of competitiveness combo”.

The government’s possibilities regarding the exchange delay

We are worried about the exchange rate delayand we take the measures within our reach,” he said. Lacalle Pou, and added that “I hope the dollar rises, that it is closer to 40 pesos”. His statements are similar to those he had at the beginning of June, when he indicated that the government would try to appreciate the currency to 39 or 40 pesos. At that time, the price was 38,743 pesos, while today it is barely above 38 pesos—and after an exceptional rise in recent days that managed to place the currency above the range of 37 pesos, where it was for 23 consecutive days.

Beyond the concern expressed in this regard, the president acknowledged that the government does not have many tools to reverse the exchange rate delay. “One is what public companies have done in the purchase of currencies and the other is the central bank lowering the interest rate.”

However, he noted that improvements in inflation They also contribute to increase competitiveness, while purchasing power improves in all sectors. In that sense, he assured that we have not had today’s inflation for 20 years. “That is good news for the country.”

Besides, Lacalle Pou considered that “there is a lot trust in the country and that translates to confidence in the Uruguayan peso. No investments have been seen that come to invest in speculation and that that supports the price of the dollar. It is because of economic activity.”

Source: Ambito

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