Argentina's Central Bank will extend the debt maturities of the country's agricultural producers who have been hit by a severe drought, seeking to mitigate the impact on a business that is one of the pillars of the domestic economy, President Mauricio Macri said on Tuesday (13.03.3018).
More than four months of dry weather have devastated crops in Argentina - one of the world's largest exporters of grains and derivatives - and have led to sharp cuts in estimates of soybean and corn production for the 2017/18 cycle. The situation has boosted global prices for both grains.
"The central bank is issuing a resolution that automatically extends all loan maturities without causing default for those (producers) who already have credit, and in this way enabling them to acquire new credits to get through this moment," Macri said at an event for the sector.
A central bank spokesman told Reuters the measure, which will involve a 45-day extension on loan due dates, will apply to farmers who have loans from all state and private banks in the country and who qualify under an agricultural emergency law.
The severe drought has caused irreversible losses in soybean yields, Argentina's main crop, leading the Buenos Aires Grain Exchange to cut its harvest forecast to 42 million tons, far from the 54 million projected at the start of the campaign.
Farmers in the South American country have said they fear the damage the situation will cause to their finances will have a negative impact on investment in the coming season.
"Banco Nación is going to announce a series of important loans with long grace periods so that (farmers) can continue to equip themselves with all of this equipment that we produce mostly in Argentina," Macri said, without giving further details.
Source: Reuters
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