26/09/2014 06:37 pm
Venezuela’s Biggest Bill Buys Buck on Black Market as Bonds Due
A dollar fetched 100 bolivars on Venezuela’s black market for the first time today
Bloomberg - A dollar fetched 100 bolivars on Venezuela’s black market for the first time today as the government limits companies’ access to official exchange mechanisms.
A greenback traded for 100.5 bolivars on the Colombian border today, compared with the three-tiered official exchange system ranging from 6.3 to 50 bolivars, according to dolartodar.com, a rate-tracking website. This means Venezuela’s largest bill of 100 bolivars is worth the smallest bill issued by the U.S.
Officials this month banned companies with tax arrears from accessing the secondary currency market, pushing them to the informal dealers, according to Tamara Herrera, chief economist at Caracas-based consultancy Sintesis Financiera. At the same time, the government has reduced dollar supply on the secondary markets, she said by telephone.
Venezuela has $4.5 billion of bonds maturing in October, according to data compiled by Bloomberg. The country has less than $2.5 billion in liquid reserves, according to Goldman Sachs Group Inc.
Officials have tried jailing traders, shuttering brokerages and setting up four parallel exchange systems to stem the rise of the unofficial rate in the 11 years since former President Hugo Chavez began controlling the bolivar’s price. Currency controls have failed to slow the world’s fastest inflation, while leading to shortages of everything from razors to cars.
Inflation reached 63.4 percent in August while according to economists surveyed by Bloomberg grossdomestico product shrank 2.1 percent in the second quarter.