In times of pressure on the exchange gap and a brake on the Central Bank’s purchase of dollars, the monetary authority decided to make a nod to the countryside in an attempt to accelerate currency settlement.
He BCRA announced that will not renew the rule that imposes an interest rate surcharge for credit in pesos to producers who retain more than 5% of the soybeans, a measure that expires at the end of the month. It was an angry request from the sector that the Liaison Table made public today through a statement.
“The Central Bank of the Argentine Republic (BCRA) decided not to renew the circular that imposes a minimum in the rate of bank financing that producers can access when they maintain a stock of soybeans greater than 5% of their production. The rule, promulgated in September 2022, expires on the 30th of this month and sets a floor equivalent to 120% of the Monetary Policy rate,” said the entity chaired by Santiago Bausili in a statement.
In this way, the economic team is giving the sector a nod at a time when it needs the liquidation to be accelerated, since the Central Bank was only able to buy US$115 million so far in June, despite being in the middle of the main harvest. The slowdown in the accumulation of reserves is one of the factors behind the renewed pressure on the dollar.
Dollar: will currency settlement accelerate?
The decision responds to a specific claim. The Liaison Table had requested it through a statement in which he expressed: “The countryside needs gestures and in this case the non-continuity of the rule would be an incentive, which must be ratified with the total removal of withholdings – always within a reasonable scheme – and the elimination of Country and to the Check”.
With everything, It is uncertain the specific impact that it will have as an isolated measure on the settlement of foreign currencies. It happens that, immediately, The cost for producers of financing in pesos will be lower to meet your expenses without the need to part with grains. It remains to be seen what the result of the conversations between officials and the sector is, and if it is complemented by other measures.
“This decision constitutes another step on the path outlined by the BCRA with a view to normalizing the functioning of the financial system and promoting domestic credit to the productive private sector,” said the monetary authority.
And he added: “This regulatory adaptation complements other measures such as Communication A8043 of June 13, which made credit standards more flexible for the group of entities that qualify as Large Exporting Companies (GEE). On that occasion, restrictions on financing were eliminated in foreign currency, along with other flexible actions”.
“As the BCRA advances in the recovery of macroeconomic stability, its authorities will continue to evaluate options to relax distortive and discriminatory regulations, in order to facilitate the redirection of bank credit from the public sector to the productive private sector,” he concluded.
