The Business Chamber proposed an exchange rate of 50 pesos to encourage inbound tourism.
Tourist entrepreneurs Maldonado raised the possibility of implementing a differential exchange rate during the high season as a measure to promote tourism in Uruguay, based on incentives for local competitiveness, a proposal that the government will study.
The tourism sector as a whole observes with concern what is happening in Argentina, where the devaluation it only deepens the exchange difference and, therefore, the price gap between both countries that already damages the national economy completely. With the approach of the summer season, the need to take support and promotion measures for an area that, although it has improved, has not yet recovered its pre-pandemic numbers, business associations continue to provide alternatives.
In that sense, the financial market analyst Michel Bomsztein presented to the government the idea of a tourist dollar, focused on consumption with debit and credit cards during the summer season and until Tourism Week, according to the weekly Busqueda. This is a differential exchange rate to encourage foreign visitors to choose Uruguay as your vacation destination.
A dollar for tourists amid the local exchange rate delay
The proposal consists of raising the price of the dollar to around 50 pesos —yesterday it closed at almost 39.4 pesos—, a value calculated based on the evolution of inflation in neighboring countries and the devaluation of the Argentine currency, as explained by the president of the Maldonado Business Chamber, Rolando Rosemblumwho pointed out that this measure “would leave us in equal conditions of competitiveness”.
Based on the study presented by Bomsztein, it indicates that the implementation of this type of differential exchange would imply for the government a tax waiver of $37.2 million —added to the impact on the fiscal accounts that the VAT discount of the 9 points that will already be applied, as well as the 0% rate on this tax that is sought to be extended this season for Uruguayan tourists. The higher price would make the exchange difference smaller for foreign tourists and, therefore, Uruguay not so expensive in the eyes of visitors from neighboring countries—especially Argentina. As Rosemblum pointed out, it would be a “oasis of competitiveness”a “formula to create a favorable environment for consumption.”
For his part, the president Luis Lacalle Pou He committed to working with his economic team on this request, which, he stressed, would be a “benefit for the consumer” and not a discount for companies. However, it must also be considered that, in August, a similar idea was raised before the president of the Central Bank of Uruguay (BCU), Diego Labat, by Chamber of Tourism; and was flatly rejected. In any case, it is possible that the future of the situation—marked by uncertainty in Argentina’s political-economic scenario and the strong devaluation it suffered in recent months—makes it possible to rethink some previous decisions or positions.
The unions, meanwhile, expect a response by mid-October, the date on which most people make decisions regarding their vacations, a key moment to announce promotional measures for the sector and economic and fiscal incentives for tourists.
Source: Ambito
