Venezuela Plans New Foreign-Exchange System as Bolivar Slides

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http://www.bloomberg.com/news/2013-09-17/venezuela-plans-new-foreign-exchange-system-as-bolivar-slides.html

By Jose Orozco - Sep 17, 2013 2:06 AM ET ..Facebook Share Tweet LinkedIn Google +1 1 Comment
Print QUEUEQ..Venezuela will unveil a new foreign-exchange system as the bolivar slides to a record low in black-market trading, Finance Minister Nelson Merentes said.

The black-market dollar is high because the currency is scarce as a result of hoarding and speculation, Merentes said in an interview yesterday on the Globovision network. A new devaluation of the bolivar “is not being considered,” he said.

“We want to use this market to encourage the private sector to sell their dollars in a transparent, logical and rational way in a market as they did before,” the finance minister said, referring to the new system. A supplementary foreign-exchange auction platform introduced in March, known as Sicad, “needs to be evaluated,” he said.

Shortages of goods in Venezuela ranging from sugar to beef are stoking one of the world’s highest inflation rates as importers struggle to obtain foreign currency. The annual inflation rate accelerated to 45.4 percent last month from 42.6 percent in July, while the scarcity index measuring the amount of goods out of stock on store shelves reached 20 percent, the central bank said Sept. 10.

Venezuela devalued the official rate to 6.3 bolivars per dollar from 4.3 bolivars in February. On the black market, one dollar currently buys around 44.7 bolivars, according to rate-tracking website dolartoday.com, which tracks the exchange rate on the border with Colombia.