MercoPress. South Atlantic News Agency

Uruguayan exporters concerned over waning currency exchange

President Lacalle Pou ruled out price controls

The Uruguayan Exporters Union (UEU) Tuesday expressed its concern through a statement in light of a waning exchange rate between the local peso and the US dollar, which has reached its nadir for the past two years, thus adding to the “uncertainty” and “volatility in international markets.”

The US currency depreciated around 0.3% Tuesday, trading at US$ 1 / UR$ $ 41.19, according to local economic reports. In March, the dollar has already fallen 3% against the peso, and 7.7% from 2021's last trading session.

The UEU statement pointed out that, given the current economic situation, new mechanisms should be generated to avoid “abrupt and persistent” variations in the value of the U.S. currency, which affects exports in general and Uruguayan industrial products in particular.

In recent weeks, since the outbreak of the war in Ukraine, exporters have shown their concern about a crisis affecting the sector worldwide. The rise in fuel prices and the lack of products such as wheat grain is influencing an increase in prices both for producers -who then have to export- and for local consumers.

President Luis Lacalle Pou announced his administration would adopt a series of support measures, but ruled out any interventionism regarding price controls.

Exports from Uruguay, excluding free trade zones, registered an increase of 49.9% in February 2022 compared to the same month in 2021, according to the latest UEU report published March 2. In February, sales abroad yoy reached US$ 9,672.8 million, 37.6% more than the previous interannual period.

”The Uruguayan Exporters Union (UEU) is concerned about the recent drop in the dollar, which this week reached the lowest level in the last two years,“ the statement went on.

”This situation is detrimental to the entire export sector and, in particular, to the export manufacturing industry, a major generator of jobs. The institution is in permanent contact with the authorities, expressing its deep concern for the current situation,” the document also warned.