Girish Gupta

HOME

PHOTOS

ONLINE

Twitter
Instagram
IFTTT
Facebook
LinkedIn
Keybase
GitHub

BY COUNTRY

Brazil
Colombia
Cuba
Ecuador
Egypt
Guyana
Iraq
Jordan
Lebanon
Mexico
United Kingdom
Venezuela

BY MEDIUM

Text
Photo
Radio
TV/Video

BY PUBLISHER

Al Jazeera
BBC
BuzzFeed
CBC
Christian Science Monitor
CNN
Daily Mail
Datum
Ecologist
Economist Intelligence Unit
Emerging Markets
Financial Times
Foreign Policy
France 24
Fusion
GlobalPost
Guardian
Independent
La Prensa (Panama)
LatinFinance
Mancunion
Monocle
National (Abu Dhabi)
New Internationalist
New Statesman
New York Times
New Yorker
NPR
PBS
PRI
Radio France Internationale
Reuters
RTE
Sky News
Sun
Sunday Times
Telegraph
TIME
Times of London
USA Today
Vice
WLRN

ABOUT

About
CV
Contact (PGP Key)
Venezuela sets new exchange mechanism, as currency continues to slide
May. 24, 2017 — Caracas, Venezuela

Venezuela set a range on Wednesday for the first offer in its new DICOM foreign exchange mechanism, effectively devaluing the previous SIMADI exchange rate by at least 60 percent as the currency continues its slide.

The central bank said it would accept bids for dollars between 1,800 bolivars and 2,200 bolivars during two weekly auctions. These bounds are only designated for the first "offer."

DICOM is designed as another addition to the OPEC country's complex currency controls, the fifth such plan in four years by a socialist government that has repeatedly balked at revamping its state-led economic system.

Complex currency controls, enacted first in 2003 in order to prevent capital flight, are thought by many to be behind Venezuela's economic crisis, which has left millions suffering food and medicine shortages.

Most Venezuela say they cannot get access to official exchange rates anyway and so must go to the black market, on which the bolivar currency has collapsed more than 99 percent against the dollar since President Nicolas Maduro won the presidency in 2013.

A thousand dollars saved then in local currency would be worth less than $5 now.

On the black market, a dollar fetches nearly 6,000 bolivars - a far cry from the SIMADI rate which on Tuesday was at 728 bolivars per dollar.

Venezuela's strongest rate, known as DIPRO, is at 10 bolivars per dollar and reserved, says the government, for essentials such as food and medicine.

"The new DICOM is an efficient, rational and transparent mechanism," said economy vice president Ramon Lobo on Tuesday, showing presentations with complex flow charts explaining how it would work.

The first auction will take place on Thursday with results released on Tuesday, said the central bank. Venezuelan citizens may buy up to $500 every quarter and companies up to $400,000 a month. (goo.gl/in0Gzh)

Government critics have long lambasted the Byzantine process by which Venezuelans are forced to obtain hard currency, blaming it for the crisis.

The ruling Socialist Party's efforts at creating similar auction systems over the last four years have floundered because they set artificially low exchange rates that left buyers seeking more dollars than the central bank had available to sell.

Various exchange mechanisms have failed to satiate demand for dollars over the last decade, and the various acronyms for the exchange rates - SITME, SIMADI, SICAD, SICAD II, DIPRO, DICOM - have come in for much criticism.

Filed from
Caracas, Venezuela






More...

Ousted Venezuelan prosecutor says she fears for her life, will keep fighting
Aug. 10, 2017


Venezuela quells attack on military base, two killed
Aug. 6, 2017


Exclusive: Venezuelan vote data casts doubt on turnout at Sunday poll
Aug. 2, 2017


All eyes on Venezuela military after protests, vote
Aug. 1, 2017


U.S. 'sweetheart' of Venezuela sees worrying signs of authoritarianism
Jul. 29, 2017


Venezuela money supply surges 10 percent in one week, fastest in 25 years
Jul. 29, 2017


Exclusive: At least 123 Venezuelan soldiers detained since protests - documents
Jul. 6, 2017


Venezuela hikes minimum wage 50 percent, effectively down 17 percent
Jul. 2, 2017


Venezuela movie actor behind helicopter attack on government buildings
Jun. 28, 2017


Fourteen Venezuelan army officers jailed in first week of protests - documents
Jun. 6, 2017


Exclusive: U.S. considers possible sanctions against Venezuela oil sector - officials
Jun. 4, 2017


Exclusive: Trump administration concerned about U.S. firms giving financial 'lifeline' to Venezuela
Jun. 4, 2017


United Airlines ends flights to Venezuela, further isolating country
Jun. 3, 2017


Venezuela sets new exchange mechanism, as currency continues to slide
May. 24, 2017


Exclusive: Venezuela holds 5,000 Russian surface-to-air MANPADS missiles
May. 22, 2017








© Girish Gupta