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21:34, 18 July 2018 Wednesday
14:43, 15 March 2013 Friday

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Venezuela to auction dollars to counter black market -reports

After that devaluation, the black market rate for dollars jumped to about four times the new official rate.

World Bulletin / News Desk

Venezuela's central bank may auction U.S. dollars in a second official currency exchange mechanism designed to improve the supply of greenbacks and counter black market trading, newspapers said on Friday.

Acting president Nicolas Maduro said this week that the OPEC-member country's government had decided on a second complementary system to run parallel to state currency board Cadivi's sale of a restricted amount of dollars at a fixed rate of 6.3 bolivars.

The second system, the newspapers said, would be via direct sales of dollars from oil revenues, as opposed to a similar mechanism in the past, known as Sitme, based on bond transactions.

"The central bank will fix the official price, which will rise or fall depending on the daily offer of dollars," El Nacional said, quoting an unidentified source with knowledge of the plan.

Venezuela devalued its bolivar currency by 32 percent last month in the fifth such move in a decade under the socialist rule of President Hugo Chavez. He died last week of cancer, and his interim replacement Maduro is running for election in April.

After that devaluation, the black market rate for dollars jumped to about four times the new official rate.

Businesses have for years complained about restrictions on access to foreign currency, while the government says it is obliged to maintain controls to counter speculative trading.

Another newspaper, El Universal, said the new parallel mechanism could have a price of about 9 bolivars to the dollar.

That would compare with 5.3 for the old Sitme system.

"This new scheme will represent the end of the devaluation," El Universal said.

Maduro, who is being closely watched by financial markets for details of post-Chavez economic policies, said this week the new "complementary" currency system would be "completely different" from those in the past.

"It is ready, there are a few details left to sort out," he said in a television interview. "We hope to announce and activate it very soon and involve all sectors."

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