Cheap dollar in Uruguay? For the rural sector, there is an exchange rate delay of 25%

The dollar in Uruguay currently costs 13.2% more than it did at the end of 2021.

A few weeks ago, the Minister of Economy asked economic agents to demand more dollars so that the exchange rate does not appreciate.

But the situation is not only worrying the Government but also the private sector, and the countryside is already starting to talk about exchange rate backwardness.

This is what Gonzalo Valdés Requena, president of the Rural Association of Uruguay (ARU), said a few days ago in an interview granted to La Mañana.

The farmer said the situation “complicates the competitiveness of the whole sector.”

WHAT DID GONZALO VALDÉS REQUENA SAY?

Valdés Requena explained that he started meeting with the Central Bank of Uruguay (BCU) in June 2022.

“We already saw a deviation of the quotation.”

“At that time, we were told that the dollar was in its fundamentals.”

“Subsequently, when we saw that the situation continued to worsen, we met with them again, in December, the president of the BCU, Diego Labat, and the Minister of Economy, Azucena Arbeleche.”

“We raised our concern with them, and they understand it; they know what it means for the export sector,” he said.

The farmer explained that the authorities argue that there is an excess of dollars in the market, which would cause the dollar rate to be so low.

“We estimate that the dollar should be 25% above the current rate.”

He also stated that the country is suffering a loss of competitiveness and that, at the level of producers, the drop in purchasing power has been very large.

“That is to say, you have to calculate that 25% deviation in the backwardness plus inflation, and you realize that, with that number, the purchasing power of those of us who have to sell dollars has been greatly reduced.”

On the other hand, he assured that the drought is hitting “very hard, at historical levels that have not been seen for many years.”

“The damage is significant.”