Strict Currency Controls: Lot of philosophy, little substance

February 7, 2003

After two weeks without foreign currency exchange, we now have a decree, that says very little. Basically, the degree prohibits just about everything, sets the exchange rate at Bs. 1600 to the US$, but says very little about how anybody will get them. The new ecchange office will be all-powerful to set the rules and decide. Of course, you will have to register, request, prove, beg and probably pay something if you are an importer. But the rules will be decided by a new office, since after two weeks there was no agreement on how to do it. Thus, it will be a while before the system actually starts working, allowing the black/grey/whatever market to flourish at around Bs. 2200 to the US$. Third time in twenty years we wil have exchange controls. Once again, it will be a disaster. As Venezuelans like to say, we have seen this movie before…..

This entry was posted on February 7, 2003 at 1:26 am and is filed under Venezuela.

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