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Argentina soy trading volume hits highest since 2017 after FX boost, grains exchange says

BUENOS AIRES, Sept 6 (Reuters) - Argentina's daily soy trading volume has hit its highest level in five and a half years, the country's Rosario grains exchange said on Tuesday, after the government introduced a preferential "soy dollar" foreign exchange rate to boost exports.

The Rosario grains exchange said in a report that Argentine soy operations registered on Monday, the first day the FX rule came into effect, had been close to 800,000 tonnes, which it said was the highest trading volume since early 2017.

On Sunday, Argentina's Economy Minister Sergio Massa announced new temporary incentives for soybean farmers to sell more of their stock by accessing a better exchange rate, in a bid to boost exports and hard currency reserves.

Argentina is the world's top soy oil and meal exporter, as well as the No. 3 for soybeans. But farmers have been holding onto soybean stocks longer than last year as a hedge against potential devaluation of the embattled local peso currency.

Amid a deep economic slump marked by soaring inflation, President Alberto Fernandez's government is seeking to boost U.S. dollar reserves to meet the terms of a $44 billion debt deal with the International Monetary Fund.

Traders and analysts said the flurry of soy trades was already impacting local markets.

"There is an unusual sale of soybeans and this is in line with what was announced by the government," said Armando Torre, a local foreign exchange analyst.

"Everything suggests that an avalanche of dollars is coming, useful for the central bank's reserves, even though none of the bigger underlying issues of the economy have been solved."

(Reporting by Adam Jourdan and Jorge Otaola; editing by Jonathan Oatis)

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