The Argentine crisis of 2001 had devastating effects on the economy. Since then, Argentina has struggled to find a sustainable path to recovery. Domestically, the inflation rate will probably reach 100% this year. The international accounts are also in a precarious state.

Let's look at the foreign exchange rate market. In theory, the official exchange rate is determined by market forces, but the Central Bank often intervenes. In addition, access to the official exchange rate is limited to authorized transactions. Not surprisingly, a black market has emerged. Today, the official exchange rate (171 pesos per US dollar while in the black market (known as the "dlar blue") is 310)pesos per dollar.

A- You are an exporter of soybeans in Argentina. You only have access to the official exchange rate. What strategies would you consider given this situation? (Hint: Think inside and outside the box.)

B- In the last few months, the government decided to create new exchange rate known as the "soybean dollar" that would allow exporters to have access to an exchange rate 30% higher than the official one. Why do you think the Argentine government is doing that? Explain.