Venezuela finmin says over $200 mln sold at currency auction

CARACAS, July 17 Wed Jul 17, 2013 1:15pm EDT

CARACAS, July 17 (Reuters) - Venezuela's central bank sold more than $200 million at an auction of its revamped currency exchange system that closed this week, Finance Minister Nelson Merentes said on Wednesday.

Merentes told reporters he expects the country's high inflation rate to ease by August, adding that economic growth figures for the second quarter of this year would be an increase from the 0.7 percent recorded in the first quarter.

Local businesses are awaiting the results of the auction by the revamped system, known as Sicad. The government wants to increase the flow of dollars to importers and address public complaints about nagging product shortages.

"Every 15 days we are going to hold auctions and it is possible that more than $200 million will be sold at each one," Merentes told reporters in Caracas. "There were some problems with the banks, but they have been resolved ... the important thing is that a lot of people are taking part."

He said more than $200 million was being sold because an unnamed participant decided to sell greenbacks at the auction.

"We want more companies to sell dollars," he said.

The central bank had said last week that it would sell $200 million, with $170 million being allocated to the private sector and $30 million to individuals.

The auction began on Friday and ended on Tuesday, and the dollars are due to be paid out this Friday.

This sale was restricted to companies registered in two Venezuelan states and to firms in the automotive and health sectors. Businesses could place orders of up to $1.02 million, while individuals traveling abroad may request up to $2,500.

Officials say other sectors and states will be addressed in future auctions. Sicad, which operates in parallel with a decade-long currency control mechanism, will provide dollars at a higher rate than the official exchange rate of 6.3 bolivars.

Businesses have complained for months that lack of access to hard currency has stopped them from importing consumer staples ranging from wheat flour to toilet paper.

Venezuelan President Nicolas Maduro, who won an election in April after the death of longtime leader Hugo Chavez, faces a raft of economic challenges, including slowing growth, rising consumer prices and nagging shortages of consumer goods.

Growth slowed to 0.7 percent in the first quarter, compared with 5.9 percent in the same period in 2012. Monthly inflation slowed to 4.7 percent last month, down from 6.1 percent in May, but the annual rate rose to almost 40 percent.

Merentes said the economy did not face so-called stagflation.

"It is decelerating," he said, referring to the inflation rate. He added: "We are going to see better results. Given this panorama, one cannot say we are facing stagflation."

He declined, however, to give an estimate for the annual inflation figure.

"Inflation is trending downward ... we hope July will be better and that in August, we will have normal levels," Merentes said.

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Comments (1)
xaxacatla wrote:
So, how much did the dollar sell for?

Jul 17, 2013 8:32pm EDT  --  Report as abuse
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