Venezuela to Auction Dollars to Fight Black Market Rate
By Corina Pons & Jose Orozco - Mar 19, 2013 5:45 PM ET
Venezuela will start auctioning dollars to importers, especially of medicine, food and industrial equipment, to arrest the bolivar’s decline in the black market and ease inflation.
The greenbacks will be auctioned with prices starting at the official rate of 6.3 bolivars per dollar, central bank President Nelson Merentes said today on state television. The dollars will be cheaper than in the black market, where they sell for as much as 23.5 per bolivar, he said.
“It’s not about a set rate,” Finance Minister Jorge Giordani said today at a news conference in Caracas. “There will be a predetermined supply, and it will be democratic and open.”
A shortage of dollars in Venezuela has deepened since February, when then President Hugo Chavez approved a 32 percent devaluation of the bolivar on the official market, or Cadivi, and shut down a separate central bank-administered currency market before he died on March 5. The shortage has pushed down the bolivar on the black market and fueled inflation as the country heads toward a presidential election scheduled for next month.
more:
http://www.bloomberg.com/news/2013-03-19/venezuela-to-announce-complementary-foreign-exchange-system.html
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