Venezuela does not plan to devalue its currency or make any changes to its existing foreign exchange system, the nation’s Finance Minister Rodolfo Marco said during a televised interview with local media on Sunday, according to Reuters.
“There is a guarantee that we will maintain that foreign exchange system in such a way as to meet all the country’s needs,” the Finance Minister said during the interview.
Venezuela’s currency control system, which uses a three-prong approach, providing U.S. dollars on three different official exchange rates: 6.3 bolivars for “priority goods”, around 12 bolivars at the “intermediate” Sicad I rate, and around 50 bolivars at the “complementary” Sicad II rate.
Reuters highlights that the OPEC nation of Venezuela could perhaps suspend sales of U.S. dollars at a rate of 6.3 bolivars to shield the nation’s tumbling currency reserves amid falling oil prices.
The fall in oil prices comes at a particularly bad time for Venezuela amid the nation’s soaring inflation, a plunge in the value of the national currency to all-time lows, depleting foreign currency reserves (currently at the lowest level since November 2003), weak or contracting economic growth (the Venezuelan government has suppressed official GDP data), food and product shortages, fleeing global airlines and manufacturing firms, tremendous debt challenges, and a growing risk of a sovereign debt default (here, here, and here).
Sources: Reuters, WSJ, Bloomberg, The Economist, El Universal, Business Insider