- Title: Venezuela launches fifth forex plan in four years
- Date: 23rd May 2017
- Summary: CARACAS, VENEZUELA (MAY 23, 2017) (REUTERS) ****WARNING CONTAINS FLASH PHOTOGRAPHY*** GENERAL VIEW OF MEETING BETWEEN FINANCE MINISTER, RAMON LOBO, AND DIRECTORS OF THE VENEZUELAN CENTRAL BANK LOBO AND DIRECTORS SITTING AT DESK AT FRONT OF ROOM SCREEN WITH PRESENTATION ABOUT THE DICOM CURRENCY CONTROL MECHANISM (SOUNDBITE) (Spanish) FINANCE MINISTER AND ECONOMY VICE PRESIDENT, RAMON LOBO, SAYING: "With this system we hope to normalise in first place the functioning of the currency system, we are going to optimise it, which will allow us to generate a level of certainty about the behaviour of such an important variable, which will translate into decisions being made with regards to those elements which we have pointed out, which we have established." GENERAL VIEW OF MEETING GUESTS AT THE MEETING (SOUNDBITE) (Spanish) PRESIDENT OF CENTRAL BANK OF VENEZUELA, RICARDO SANGUINO, SAYING: "What is understood is that it is a transparent system which looks for balance in transactions relating to currency providers and claimants, and with that we can achieve greater stability in the currency system, and therefore also in our economic and financial activities." VARIOUS OF AN IMAGE OF VENEZUELAN BOLIVARS AT THE ENTRANCE TO THE AUDITORIUM
- Embargoed: 6th June 2017 19:32
- Keywords: forex crisis currency controls Venezuela
- Location: CARACAS, VENEZUELA
- City: CARACAS, VENEZUELA
- Country: Venezuela
- Topics: Currencies/Foreign Exchange Markets,Economic Events
- Reuters ID: LVA0016I2A9FN
- Aspect Ratio: 16:9
- Story Text: Venezuela on Tuesday (May 23) announced a new foreign exchange auction mechanism to complement its currency control system, the fifth such plan in four years by a socialist government that has repeatedly balked at reforming its state-led economic system.
The mechanism, known as New Dicom, will offer dollars within a band determined by the central bank, Finance Minister and Economy Vice President Ramon Lobo told a news conference, without specifying what that band would be.
Economists say Venezuela needs to abandon its 14-year-old exchange controls rather than create auction systems to complement it, adding that previous auction platforms have failed to provide a steady supply of dollars to the economy.
Lobo said the government was looking to normalise and optimise the functioning of the currency system.
Venezuela, which suffers triple-digit inflation and major product shortages, sells greenbacks for 10 bolivars for food and medicine through the government currency agency.
It also sells greenbacks at 726 bolivars for less important items through an auction system known as Simadi.
Most Venezuelans say they cannot gain access to either of those rates, and instead rely on the black market where a dollar currently fetches more than 5,800 bolivars.
The 2014 crash in oil prices left the government without enough hard currency to supply the exchange controls, spurring an economic crisis that has left many Venezuelans skipping meals. The OPEC nation relies on oil for around 94 percent of its foreign income.
- Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2017. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None