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Venezuela plans new exchange for better dollar supply

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(Globalpost/GlobalPost)

Venezuela is planning a complementary system to increase a supply of dollars hindered by strict currency control measures, acting President Nicolas Maduro said Wednesday.

As it stands, under currency controls put in place in 2003, businesses trying to import goods and private individuals seeking greenbacks have a hard time getting dollars.

Maduro told private television station Venevision that the new mechanism was ready and the government would activate it soon, and it would be aimed at both companies and everyday people.

Before his March 5 death from cancer, president Hugo Chavez approved a 32 percent devaluation of the bolivar that weakened it to 6.3 bolivars per dollar -- from 4.3 bolivars per dollar.

It also eliminated a system that set another official exchange rate of 5.3 bolivars to the dollar for non-essential imports. It could be used in a very limited fashion for some transactions. This rate was established in 2011.

Venezuela, the country with the largest proven oil reserves in the world, gets 96 percent of its hard currency from oil revenues as the black gold is paid for in dollars.

Those dollars are assigned to the public and private sector to import goods and services. Venezuela is highly dependent on imports.

Maduro said the new system was designed to ensure proper administration of the petro-dollars that come into Venezuela and keep businesses from hoarding them.

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http://www.globalpost.com/dispatch/news/afp/130314/venezuela-plans-new-exchange-better-dollar-supply