Economy
Trade in Venezuela's unofficial currency market (parallel market) was halted on Thursday after US authorities froze a bank account used for foreign exchange transactions, traders told Reuters

Sources said that the "umbrella account" with various sub-accounts is located in one of the major US banks, specifically the Bank of America. The bank account was frozen after US enforcement authorities detected on Wednesday an incoming transfer that was being investigated.

Operators said that nobody is doing anything in the market and it is totally paralyzed. They also said that about 65 percent of local parallel market traders have sub-accounts in this "umbrella" instrument.

Local traders said that a judicial order to freeze the assets in the account was issued in the United States. The order affects 49 brokerages and market operators in Venezuela.

The amount of money frozen would be around several hundred million dollars and nobody knows exactly how long the process can take.

Traders said that if the situation persists in the coming days, the parallel market could turn into a mess because analysts consider that some of the operators affected could be one of the traders to whom the state-run oil company Petróleos de Venezuela (Pdvsa) sells its currencies.

This means that many of the operations will not be carried out and "there will be defaults all over the market," which could unleash a domino effect. According to local traders, if the problems persist, the oil industry would have difficulty to supply foreign currency to the market and some traders may not receive their payments in bolivars after their failure to hand over the foreign currency, as reported by Reuters.

Although authorities have not confirmed the rumor, Venezuela's oil industry is allegedly selling dollars in the parallel market, and this has had an impact on the exchange rate.