Imports going up the elevator and exports going up the stairs

Exchange rate policy is, these days, one of the most closely watched issues by the Argentine productive sector. No wonder: the official dollar has approached the upper limit of the floating band established by the Central Bank, marking a turning point in the dynamics of the real exchange rate and posing growing challenges on the monetary front.

Since the implementation of the new exchange rate bands in mid-April, the multilateral real exchange rate (MERER) has accumulated a 21% improvement so far in 2025, and a 25% improvement since the start of the regime. This restructuring was due to both local and external factors: on the one hand, the slide in the nominal exchange rate against the dollar in a context of low pass-through ; on the other, the appreciation of key currencies such as the Brazilian real, the euro, and the yuan, which strengthened the bilateral real exchange rate with our main trading partners. Against the dollar alone, the real exchange rate has improved 17% since April.

This shift is not minor: according to IMF estimates, by the end of 2024, the Argentine peso was lagging between 15% and 25% behind its equilibrium exchange rate. Recent dynamics have substantially narrowed this gap and helped ease tensions over the sustainability of the external front. In historical perspective, the multilateral real exchange rate today stands at levels similar to those of mid-2018 , when strict exchange controls were not yet in place. Most importantly, this improvement was achieved without causing a significant acceleration in inflation . In June, the headline CPI was just 1.6% monthly, and core inflation stood at 1.7% , confirming a contained pass-through .

In short, the current exchange rate, while more competitive, does not appear excessive : it partially corrects a previous deviation without generating a new misalignment. And, unlike the typical Argentine cycle of backwardness and abrupt correction, this time the adjustment was more orderly. But the central question is another: Is the new dollar functional to an export development strategy? Does it incentivize a sustainable improvement in the trade balance or simply postpone structural imbalances?

For now, the latter . The new exchange rate scheme temporarily eased the external situation, but failed to reverse the structural weaknesses of Argentine foreign trade. Exports continue to grow slowly , with a concentrated basket and low exchange rate elasticity. Imports, on the other hand—more sensitive to the level of activity and trade openness —soared in the first half of the year. The result was a trade surplus that plummeted 74% year-on-year .

Indeed, during the first half of 2025, imports grew 35% year-on-year in value and 45% in volume, while exports barely increased 4% . The increased import momentum was primarily due to capital goods (up 73.8% in value and +70.6% in quantity) due to the rebound in investment from very low levels, and consumer goods (up 73.5% in value and +69% in quantity), reflecting a more open economy and a more competitive exchange rate.

This process is even more evident when viewed in historical perspective: imports at constant prices already exceed the levels of the last five years and are at their highest levels since 2017. In terms of GDP, they climbed to 18% in the first half of the year, a level not seen since the peak in 2011–2012, before the hard currency controls were imposed. This is not just a post-drought rebound or a restocking of stocks: we are witnessing a change in the demand pattern, where the new exchange rate has driven a rapid expansion of imports without an equivalent export correlation.

Looking ahead to the second half of the year, it is reasonable to expect a moderation in the pace of import growth, both due to a higher comparison base and the lagged impact of the exchange rate and the slower activity. Even so, imports are expected to continue growing faster than exports—which are less sensitive in the short term—and the year is expected to close with a limited trade surplus of between US$6 billion and US$7 billion , well below the US$18.9 billion expected in 2024.

The new exchange rate offers some relief, but it doesn't address the root of the external imbalance: an economy that imports more than it exports in value added, and whose international integration remains vulnerable. True competitiveness isn't consolidated through exchange rates alone: it requires productivity, scale, logistics, financing, and stable rules of the game. Until this materializes, the risk is that this relief will be a pause rather than a turning point.

From a macroeconomic perspective, a more competitive exchange rate is a necessary—though not sufficient—condition for consolidating the external order without incurring new restrictions or returning to backwardness. From a sectoral perspective, it represents an opportunity to redefine strategies: replacing imports where efficient, gaining external market share in sectors with potential, and reviewing the production and supply mix. From an economic policy perspective, the challenge is to sustain this competitiveness without sacrificing anti-inflationary anchors or fiscal consistency.

Added to this is a structural component. Even in a favorable exchange rate scenario, Argentine export development is not defined by the price of the dollar, but by the ability to scale sectors with dynamic comparative advantages. Vaca Muerta, mining, agriculture, and the knowledge economy chart a concrete path of expansion, with the potential to contribute more than US$128 billion in foreign currency over the next decade. But this potential is not activated by the exchange rate alone: it requires investment, infrastructure, regulatory predictability, and a supportive macroeconomic environment . The strategic objective is not only to export more, but to export differently : diversifying the basket, reducing seasonal dependence, and building a more sophisticated global integration, less exposed to climate or price shocks .

Furthermore, there is no lasting competitiveness without productivity . The exchange rate can provide temporary relief, but without genuine improvements in productivity, international integration is unsustainable. Today, that link remains the weakest: recovering wages, still-high dollar costs, and tight margins. Increasing productivity requires investment, innovation, and scale, as well as a regulatory framework that enables it . In other words, reforms. And that agenda is still pending.

In this context, companies are observing the exchange rate readjustment closely, but also with caution. They are not just looking for a higher dollar: they need conditions for investing, exporting, importing, and long-term planning. Those that sell to the world want to know if this improvement is a lasting opportunity. Those that produce for the domestic market are feeling competitive pressure from abroad and face challenges of scale and efficiency. For many, true change does not lie in the exchange rate, but in the transformation of their operating structures, their cost matrix, opening up to new markets, and incorporating technological innovation, which redefines business models and poses new challenges for employment and employability. This is where fundamental competitiveness comes into play.

Argentine foreign trade today faces a dual agenda. In the short term, it involves adapting to a new exchange rate that improves competitiveness in a still fragile environment. In the medium term, it involves reconfiguring the productive and export profile in a global context that demands what Argentina has and values resilience, traceability, and sustainability. The dollar can help. But the direction is defined by investment, productivity, and economic policy decisions. And that is the real challenge.