March 19, 2013 / 4:36 PM / 5 years ago

UPDATE 2-Venezuela gives few details of new forex system

* Government promises for dollars for importers

* Acting president Maduro faces April 14 election

By Brian Ellsworth and Deisy Buitrago

CARACAS, March 19 (Reuters) - Venezuela vowed on Tuesday to provide more dollars to importers through a new foreign exchange system, but officials gave only vague details of how it will work and skirted around key issues including what the rate would be.

The measure appears to be an attempt by the government of acting President Nicolas Maduro to ease import bottlenecks caused by a lack of dollars as he heads into an April 14 election triggered by the death of Hugo Chavez.

Maduro’s administration hopes the new mechanism will improve supplies of products such as medicine in the import-dependent OPEC nation which operates a tightly-controlled currency control system created by the late socialist leader.

But the move would almost certainly require selling dollars at a rate higher than the official rate of 6.3 bolivars - constituting a politically hazardous devaluation that could further spur one of the region’s highest inflation rates.

“We are going to increase the availability of foreign exchange,” said Finance Minister Jorge Giordani in a press conference. The new system, he added, would guarantee the “absolute transparency of the distribution of currency.”

Statements by Giordani and central bank president Nelson Merentes suggested the mechanism would sell dollars for more than the official rate, but less than the black market rate of about four times that.

But they declined to answer repeated questions by reporters as to how much the dollars would sell for, and said they had not determined how much would be sold or how often.

“The auction will be defined by some parameters, which are explained in the document that will be published ... it has to be something democratic and open but with a cap,” Giordani said.

Such a mechanism appears to be similar to one based on bond-swaps that the government scrapped in February, in which the exchange rate was effectively fixed.

Venezuela devalued its currency by 32 percent last month in the fifth such move in a decade under Chavez’s rule. Critics were already complaining on Twitter that the new mechanism constituted a second devaluation in just six weeks.

Maduro said on Monday that the new system would help lower the parallel rate, which has been a key factor in pushing up consumer prices. At around 20 percent per year, Venezuela’s inflation is one of the highest in the region.

Merchants frequently mark up prices in response to shifts in the volatile parallel exchange rate, which has weakened considerably since last year amid a dearth of greenbacks.

Critics say the decade-long currency control system creates ample opportunities for corruption by allowing well-connected Venezuelans to buy dollars at the official rate and resell them on the black market for a quick profit.

Businesses have for years complained about restrictions on access to foreign currency. The government argues that it is obliged to maintain controls to counter speculative trading.

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