Venezuela to announce new forex system; devaluation expected

CARACAS, (Reuters) – Venezuela on Tuesday will unveil a new foreign exchange system that is likely to ease the country’s three-tiered currency controls but would also mean a hefty devaluation of the bolivar currency. Finance Minister Rodolfo Marco and Central Bank President Nelson Merentes were to hold a news conference at 11 a.m. local time (1030 EST/1530 GMT) on a “new exchange scheme,” the government said.

The currency controls have been providing dollars at three different rates: 6.3 bolivars for food and medicine, and two complementary rates of around 12 bolivars and 52 bolivars for other goods through systems known as Sicad I and Sicad II. On the black market, the dollar is selling for nearly 190 bolivars, according to widely referenced website President Nicolas Maduro in January said the government would keep the preferential rate of 6.3 bolivars, maintain Sicad I at a yet-to-be-announced rate, and replace Sicad II with a new supply-and-demand driven platform.

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