More restrictions on the sale of US dollars in Venezuela
Finance Ministry Jorge Giordani said that newly announced economic moves seek a rational and fair use of US dollars
Following orders of Venezuelan President Hugo Chávez, Vice-President Nicolás Maduro published the decree establishing the agency mentioned above. Based on the regulation, five out of the nine powers of the Higher Agency for Upgrade of the Exchange System aim at limiting authorizations for the sale of US dollars at the new official exchange rate (USD 6.30 per US dollar). Authorizations shall be granted within the framework of the Socialist Plan.
The decree published in Official Gazette No. 40,108, dated February 13, 2013, outlines that the Higher Agency for Upgrade of the Exchange System will be above the Foreign Exchange Administration Commission (Cadivi) and shall design and implement any course of action in the government forex policy.
Five of the agency's functions are determining the priorities for the sale of US dollars so as to provide social well-being; encouraging growth and lowering inflation; channeling the quality and quantity of exports in order to attain budget goals; balancing the flow of US dollars in order to match the budget needs; guiding the application of the non-production certificates and annually presenting import and export policies to the president. All these powers are governed by the Social and Economic Development Plan.
Moreover, the agency shall coordinate US dollars revenue from oil sales and other sources in order to attain a wider spillover effect. Additionally, it will outline and submit policies and projects to increase the flow of US dollars; guarantee the efficiency of the foreign currency administration system and create an automated system linking the Finance Ministry, the Central Bank of Venezuela, and the National Customs and Tax Administration Service (Seniat).
In a brief statement on Wednesday, Venezuela's Finance Minister Jorge Giordani remarked that the new agency aims at bringing financial stability based on the available resources.
He added, "The Government seeks the rational and fair use of US dollars (...) and the newly created agency shall make proposals upon the president's orders." He also stressed that Cadivi operated normally
Translated by Jhean Cabrera
President Nicolás Maduro is not only the heir to the throne, but also to an economic crisis which demanded urgent measures to rectify the course. The crisis showed up in two aspects: a 50% inflation estimate, and shortage of staples ranging between 70% and 98%. These issues might hit the President's poor popularity; considering his feeble electoral victory of 1% over his challenger.