Economía 24-05-2017

Venezuela presents new currency exchange auction system

Venezuela on Tuesday introduced a new exchange system that will operate through auctions of currencies with prices established in bands set by the Central Bank, with which the government seeks to "normalize" the flow of dollars needed to activate the economy.

The mechanism, the fifth that runs the government of President Nicolás Maduro, is framed in the strict control of changes in force since 2003 and replaces the Marginal System of Currencies (Simadi, for its acronym in Spanish), under which currencies were sold at around 700 bolivars Per dollar.

Economy Minister Ramón Lobo explained that through the Currency Exchange System of Complementary Floating Market Exchange (Dicom, for its acronym in Spanish) natural persons will be able to buy up to $ 500 quarterly and legal entities up to a maximum of $ 400,000 each month.

On Thursday, the first auction will be called and the next Tuesday will be given the details of the award and published results. The minister did not specify the start exchange rate.

"With this mechanism we aspire in the first instance to normalize the whole operation of the exchange system, we will optimize it," Lobo told reporters.

Those interested in participating in the auctions should register on the website of the Central Bank of Venezuela (BCV) (www.bcv.org.ve), the Dicom (www.dicom.gob.ve) and have accounts in bolivars and dollars In public banking.

"The Central Bank of Venezuela (BCV, for its acronym in Spanish) is the authority that will define the upper and lower limits of the band, which will be announced at the time of the call," added the minister.

The scaffolding of Venezuelan exchange control is also composed of the Dipro system, the exchange rate protected, where the dollar is quoted at 10 bolivars, and is mainly intended for the purchase of food and medicines by the public sector. The authorities did not refer to this system.

Economists expect Dicom to be focused on the private sector, which, amidst the deep crisis and the strong negative impact on its incomes of falling oil bills, complains about not having the resources to keep pace Of its imports of raw materials.

Venezuela is experiencing a sharp recession, with food and medicine shortages and three-digit inflation. This situation has agitated political moods and has led millions of people to protest against the socialist government of Maduro.

In Venezuela also operates an unregulated market, where the US currency reached around 5,800 bolivars on Tuesday, according to the US portal dolartoday.

The government has tried in several ways to deflate the advance of the "parallel" dollar, but experts say that this will not be possible without a large injection of dollars into the economy, something that hesitate amid the narrowness of resources.

Reuters