By Eyanir Chinea and Daniel Wallis
CARACAS Oct 11 Venezuela will auction $100
million at weekly central bank auctions through a complementary
foreign exchange system aimed at easing access to hard currency
for local businesses, a top government official said on Friday.
The economy is a challenge for the government of President
Nicolas Maduro, with importers complaining they are starved of
greenbacks, while the annual inflation rate hit almost 50
percent last month.
In a bid to resolve politically embarrassing shortages of
consumer goods such as car parts and toilet paper, the
government will provide the auction system, known as Sicad, with
more dollars and will hold the sales more frequently.
"Starting next Wednesday ... each week we're going to
auction $100 million via Sicad," the petroleum Minister and vice
president for the economy, Rafael Ramirez, told a news
"We have the resources to support this offensive."
The central bank says that over the last seven months it has
allocated a total of $859 million to importers through four
auctions of the Sicad mechanism, which was set up to complement
decade-old currency controls.
But trade groups representing business sectors given
priority to receive funds from those auctions say they have no
idea where most of the $859 million went.
President Maduro said late on Thursday he had approved a
further $900 million to be auctioned via Sicad.
Critics of the government say the more-frequent auctions
were introduced in the hope of getting goods back into shops
ahead of mayoral elections scheduled for December 8, then the
busy Christmas season following soon after.
The opposition accuses Maduro of ruining the country by
failing to stamp out corruption and by sticking to the socialist
policies of his mentor, the late Hugo Chavez.
The government accuses its foes of deliberately "sabotaging"
the economy as part of what Maduro says is a U.S.-backed
"economic war" aimed at forcing him from power.
Ramirez said officials would keep studying how to improve
the work of the state currency board Cadivi, which provides
dollars at the official exchange rate of 6.3 bolivars for
priority goods such as food and medicine.
"We'll keep revising, optimizing and improving Cadivi's
processes to continue attending to all our fundamental and
productive needs," the minister said.
"And we'll keep releasing dollars through Sicad for other
needs, which don't have anything to do with food, health or
other priority areas."
The government says the country's currency controls, a
cornerstone of Venezuelan economic policy since 2003, have been
exploited to the tune of billions of dollars by shell companies
claiming fictitious exports.
Set up by Chavez to stop capital flight and inflation, the
controls offer big profits for anyone who can buy dollars at a
preferential rate and then resell them for about seven times
more on the black, or "parallel", market.
"We are going to destroy the parallel market. Its days are
numbered," Ramirez said.