Argentina Temporarily Halts Export Taxes to Boost Grain Sales
Argentina has suspended export taxes on grains and by-products to boost sales and foreign currency supply amid political instability. The measure aims to reach $7 billion in declared exports. President Javier Milei focuses on fiscal balance. U.S. support and market reactions offer short-term stabilization.
In a strategic move to strengthen its economy, Argentina's government announced on Monday that it will temporarily suspend export taxes on grains and related by-products. The suspension, in effect for more than a month, seeks to enhance sales and bolster the country's foreign currency reserves as international investors remain cautious due to political instability.
Argentina plays a crucial role in the global grain market, ranking as the top exporter of soybean oil and meal, third in corn, and a significant exporter of wheat. The suspension reduces taxes significantly from previous levels. The measure begins Tuesday and continues until October 31 or until reaching $7 billion in export declarations, as detailed in the official gazette.
President Javier Milei, aiming to stabilize the local peso and maintain fiscal balance, emphasizes the need for this financial maneuver. Meanwhile, U.S. Treasury support has led to a positive market response, with Argentina's international bonds and stock index rising sharply. However, experts warn that while this offers immediate liquidity, it doesn't address long-term financial challenges.
(With inputs from agencies.)
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