August 23, 2013 / 10:57 PM / 4 years ago

Venezuela sells $335.5 million at currency auction

CARACAS, Aug 23 (Reuters) - Venezuela’s central bank said on Friday it sold $335.5 million in bonds and cash at its latest auction under its Sicad currency exchange system, which is aimed at boosting the flow of dollars to the economy.

As usual, the bank did not say at what exchange rate the dollars were sold. The auction differed from previous ones in the OPEC nation in that Sicad auctioned debt for the first time, rather than just cash.

The bank said it auctioned $300 million worth of bonds from state oil company PDVSA, which mature in 2035 and were issued last year in a private placement with the central bank. The bank said on Friday they had a market value of $239.7 million.

Those PDVSA securities were sold to local businesses, mostly importers of children’s toys, which will resell them for dollars to pay for imports. The toy sector had complained that lack of access to hard currency meant a risk of shortages in the run-up to Christmas.

Previous Sicad auctions have targeted other local businesses, ranging from automakers to the health sector. The remaining $35.5 million from the latest auction was sold to individuals, mostly those seeking to make purchases abroad.

Sicad, which operates in parallel with a decade-long currency control mechanism, provides dollars at a weaker rate than the official exchange rate of 6.3 bolivars.

The government says it is helping overcome foreign exchange bottlenecks, which private economists describe as one of the reasons for a sharp growth slowdown during the first quarter.

Business leaders complain of unclear criteria for determining winners. They say Sicad does not ensure a consistent supply of currency because companies do not know in advance if their industry will be able to participate.

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below