CARACAS Dec 16 Venezuela is boosting the use of
the foreign exchange system known as Sicad to increase the
amount of local currency it receives from oil revenue, tourism
and gold sales, the country's oil minister Rafael Ramirez said
The government's Sicad system was created to sell dollars
through auctions to importers and travelers at a rate weaker
than the official fixed rate of 6.3 bolivars. Though the
government has not made the Sicad rate public, participants have
said it has ranged between 12 and 14 bolivars.
The change would give the government a greater number of
bolivars for each dollar of oil sales, which could help boost
the supply of hard currency to the economy and ease shortages of
imported goods and services.
Ramirez said in a press conference the government would
gradually phase out the use of the country's main currency board
Cadivi, which has been the OPEC nation's principal currency
control agency over the last decade.
He said the country should begin a discussion about boosting
the highly subsidized price of fuel, which is the currently
cheapest in the world.
The fuel subsidy generates losses of $12.5 billion per year,
he said. Authorities have been reluctant to raise prices because
of riots in 1989 that were partly trigged by a fuel price hike.