The Argentine government announced on November 25 the resumption of the peso's preferential exchange rate against the US dollar for the sale of Soybeans announced in the country, which will be effective from November 28 to December 31 this year, reports S&P Global Platts.
With this decision, the government wants to boost oil exports at the end of the year and strengthen the reserves of the central bank. This could also help increase Chinese importers' demand for Argentine oil.
As clarified, the “soy dollar” has been fixed at 230 pesos to US$1, while the official rate is 166 pesos to the dollar.
With the introduction of the preferential exchange rate, Argentine farmers, who prefer to stockpile soybeans rather than sell them, are expected to increase oil sales as a hedge against inflation, as was the case in September this year.
In addition, market operators expect that China will be able to buy 1-1,5 million tons of Argentine oil crops during the "Soy Dollar" campaign in Argentina.