Venezuela unveils new foreign exchange system

[Bacchus4.0]

http://finance.yahoo.com/news/venezuela-unveils-foreign-exchange-system-182340790.html

CARACAS, Venezuela (AP) -- Venezuelan officials announced Tuesday that will allow a free-floating exchange rate for the country's battered currency while maintaining a subsidized rate for key imports.

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The government sells dollars for the most crucial imports at rates of 6.3 or 12 bolivars, demanding that retailers hold down prices to reflect the subsidies. It has also been selling currency at a third rate, around 52 bolivars to the dollar, but officials say that rate will now be replaced by a more transparent system in which dealers and buyers exchange currency on a supply and demand basis.

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As it struggles with a cash crunch, the government has limited the dollars it auctions at any of the rates, and businesses say delays in getting money for imports has fed shortages. The exchange difficulties have driven people to an illegal parallel market where bolivars have been trading at about 190 per dollar.

The new system announced Tuesday could allow greater access to dollars, but at a far higher price than legally possible before. Central Bank President Nelson Merentes encouraged Venezuelans living outside the country to use the new system to send money back home.



http://finance.yahoo.com/news/venezuela-unveils-foreign-exchange-system-182340790.html