Venezuela to launch 'complementary' system to bolster official foreign exchange system

CARACAS, Venezuela – Venezuela will launch a “complementary” foreign exchange system to facilitate the supply of U.S. dollars to priority sectors of the economy, acting President Nicolas Maduro said Monday.

Maduro told state television that the government would provide more details about the new system on Tuesday, but that its purpose would be to direct dollars to where “resources are most urgently needed” and to combat black market currency trading. It would complement the official foreign exchange system.

“We have the will to defeat the parallel dollar,” Maduro said.

Venezuela has maintained strict currency controls since 2003, leading to complaints from businesses about a dearth of dollars and creating a currency black market. Under the controls, people and businesses must apply to the government currency agency to receive dollars at the official rate to import goods, pay for travel or cover other obligations.

Central Bank President Nelson Merentes said Venezuela’s institutions are ready to implement the new alternative system.

Last month, Venezuela devalued its currency amid questions about how the government can get a grip on 22-per cent inflation and satisfy growing demand for dollars to pay for imported goods.

The country’s fifth devaluation in a decade established a new government-set rate of 6.30 bolivars to the dollar, replacing the previous rate of 4.30 bolivars.