Venezuela eases currency controls

Venezuelan President Nicolás Maduro

The Venezuelan government has eased 15-year-old currency controls, while decreeing that private banks and exchange houses are now allowed to sell dollars.

The currency controls, which require businesses and individuals to buy dollars via the state, are frequently identified as one of the main drivers of the crisis that includes hyper-inflation and product shortages.

Economists noted that the central bank remains in charge of determining the exchange rate.

The government had previously sold greenbacks through the central bank although many transactions routinely took place on the black market.

“The exchange controls are being maintained, though they are a bit more flexible,” said economist Asdrubal Oliveros of local consultancy Econanalitica, responding to social media commentary suggesting that the controls had been lifted.

Legislator and economist Jose Guerra said the measure was the furthest the government has gone in easing the controls, but that it would depend entirely on how it was implemented.

President Nicolas Maduro during five years in office has repeatedly promised to create market-based systems to improve access to hard currency.

However, each attempt has fallen apart because the systems were unable to provide steady access to dollars.

The government currently sells dollars for around 62 bolivars, while the black market rate is around 90 bolivars.

Peace PIAK