The Banco Central de Venezuela (BCV) announced late this afternoon that it would allow public and private banks to buy and sell foreign currency, significantly loosening the regime’s grip on currency exchange in the country. The news means that Venezuelans will now be able to access foreign currency through their local banks, instead of through regime or regime-approved institutions.
The news came from Minister of the Economy and Finance Simon Zerpa, who stood alongside BCV head Calixto Ortega when making the announcement. Zerpa said that the new rule would help Venezuelans “take care of their personal necessities” by allowing them to access foreign cash more easily.
Zerpa also explained that banks will trade foreign currency at a rate that is set by the BCV.
Zerpa also announced that the new measures means that private businesses can now bring foreign investment into the country more easily. Zerpa said:
Business persons can now bring in foreign money to invest in Venezuela since we are setting up all of the conditions [to do so]. The rules of the game are clear.
In 2003, Hugo Chavez restricted access to foreign currency by establishing the Comision de Administracion de Divisa (CADIVI). Since then, anyone wishing to buy or sell foreign currency had to go through CADIVI, which over the years changed names but operated under virtually unchanged principles.The government’s tight control over currency exchange eventually bred corruption and resulted in the worst scarcity that the country had seen in living memory.
Zerpa said that any entity in the business of exporting would be allowed to keep 80% of their foreign currency earnings, while the remaining 20% must be sold to the BCV for Bolivares Soberanos “in an efficient manner”.
Asdrubal Oliveros, an economist and head of the Ecoanalitica firm, reacted to the BCV’s news on the new currency exchange system with skepticism, saying that it did not re-instate the free exchange of currency in Venezuela.
Oliveros pointed to the fact that the regime still gets to dictate the exchange rate, something that he claims it will continue to do “without taking into account the factors that impact supply and demand”.
Bogota Asks Guerrilla Group to “Clarify” Its Presence in Venezuela
The government of Colombian president Ivan Duque has asked the Ejercito de Liberacion Nacional (National Liberation Army, ELN) to “clarify” its presence in Venezuela as part of a ongoing peace process between Bogota and the country’s guerilla forces.
The request was made by the High Commissioner for Peace in Colombia, Miguel Ceballos, who explained that it was vital for Bogota to have a full understanding of the ELN’s presence in Venezuela in order for any cease-fire agreement to be effective. Ceballos said:
This is something that [the ELN] must really clarify, because it’s impossible to consider a cease fire when a part of its troops are in a foreign country.
Colombia maintains that members of the ELN leadership routinely hide in Venezuela to avoid Colombian authorities.
In an interview published back in May of this year, Colombian Minister of Defense Luis Carlos Villegas said that the “porous” nature of the border with Venezuela makes it possible for the ELN and other armed groups “to pass through without any limitations”. He went further by saying:
Moreover, in the case of the ELN, we’ve detected that after the January cease fire they’ve planned and executed terrorist acts from Venezuelan soil, and that the numerous de-mobilizations that this armed group has undergone have been replaced by Venezuelans in precarious conditions.
Cooperation with other countries is working well for us, but not with Venezuela…
Regime Pays First Installment of Private Employee Subsidy
This morning, the Maduro regime made the first installment of a subsidy aimed at helping private industry bear the cost of the latest increase to the minimum monthly salary, which took effect on September 1.
Under the subsidy scheme, private sector employees received one quarter of their monthly salary today, and will receive another quarter next Friday, September 14. On September 28, the last business day of the month, workers will receive the second half of their monthly salary.
Starting in October, workers will receive their monthly salary as usual, which is in one installment at the end of the month.
Today’s deposit amounted to Bs.S. 442.50, or $4.83 at the current black market rate. In order to receive the subsidy, workers have to register with a regime website.
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