Merentes: Venezuela to pay foreign debt service on Wednesday
Individuals will be allowed to trade foreign currency under new forex system
Merentes explained that the forex exchange rate is currently "high due to shortage" arising out of the fact that "people are saving US dollars for the future just as they do with commodities." In this regard, the finance minister said authorities plan to allocate more US dollars in the domestic economy and encourage the private sector to sell foreign currency in the national market within the framework of the forex system to be incorporated in the next few days.
The senior official stressed that "financially stable" bureaus de change will be conducting the operations of the new exchange system. As to the Ancillary Foreign Currency Administration System (Sicad), Merentes expressed it is currently being discussed whether it will prevail in time.
The head of the Finance Ministry indicated that under the new system, "penalties cannot be imposed on individuals for having US dollars or trading them." For the purpose of this new system, the Executive Office evaluates the participation of the whole financial system and "some duly incorporated bureau de change with sufficient
economic means to participate in such an activity," he remarked.
Merentes pointed out that authorities have already held talks with individuals from the financial system, entrepreneurs, and those working in the capital market. "As soon as these points are in balance, we will provide details about how this is going to work," the minister hinted.
The official denied that the Venezuelan economic cabinet is approaching the International Monetary Fund (FMI), "Neither the Ministry nor its officers," said Merentes, who asserted that contact has been made with the Chinese Government and with Governments from Latin America.
The head of the Finance Ministry also expressed the need for boosting domestic production to meet domestic demand.
"Food import must be cut down and domestic production must increase."
Merentes commented that the Executive and private entrepreneurs have gathered to discuss these matters. In a meeting with Empresas Polar's Director Lorenzo Mendoza, Merentes admitted the need for industrializing the country further so as to satisfy the needs of the population.
Further, the finance minister denied that the Executive office has been planning any sort of devaluation in the short term.
Translated by Jhean Cabrera
President Nicolás Maduro is not only the heir to the throne, but also to an economic crisis which demanded urgent measures to rectify the course. The crisis showed up in two aspects: a 50% inflation estimate, and shortage of staples ranging between 70% and 98%. These issues might hit the President's poor popularity; considering his feeble electoral victory of 1% over his challenger.