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HomeBolivarian RevolutionDollar soars on Venezuela's new currency exchange

Dollar soars on Venezuela’s new currency exchange

CARACAS, Venezuela – The Venezuelan bolivar opened Thursday at 172 to the dollar on the first day of a government sponsored exchange meant to compete with the black market.

The opening rate was 27 times the official rates of 6.3 to the dollar, available only for priority imports like food and medicine.

The leftist government of President Nicolás Maduro earlier this month partially liberalized the country’s system of strict currency controls by allowing banks and brokerage houses to sell dollars at what the market will bear.

The amount of dollars that can be bought on the new exchange is limited, however, and demand for the greenback was undiminished on the black market where the dollar was trading at 190, up from earlier in the week.

Despite having the world’s largest oil reserves, Venezuela is beset by widespread shortages, soaring inflation and an economy in a deepening recession.

The dollar has skyrocketed on the black market in recent months with the plunge in oil prices.

The partial liberalization was aimed at easing a severe hard currency shortage in a country that relies on imports for nearly all its needs.

But in announcing the new system Feb. 10, the government said the new “marginal” market will handle only five to ten percent of dollars exchanged, and dollar sales to individuals will be limited to $300 a day and $10,000 a year.

It said most dollars will still be exchanged through the government at the official 6.3 rate for priority imports or at a secondary rate of 12 for most other industrial imports.

Venezuelans have not been able to freely buy and sell dollars since 2010.

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