The dollar situation in Venezuela
Sábado, Marzo 8th, 2008
The dollar situation varies according to the country in which it is, there are some nation in Latinamerica that have some favorable conditions to speculate with the exchange rate.
In February 2003 there was set an exchange control at the foreign currencies market and the price of the dollar went to 1.600 bolivares, and a year later became 1.920, and in 2005 it turned up to be 2.150 bolivares per dollar.
Venezuela has at the moment two markets where you can sell and buy dollars, but of course one is more profitable than the other. One is the official market that since 2005 keeps the exchange rate anchored to 2150 bolivares per dollar, and the other is the parallel or spot market where the dollar quotes from 5000 to 5500 bolivares.
This situation has offered excellent possibilities for those that can speculate with the value of the American currency. The business consists in buying dollars at the official market and resell them at the spot market.
The popularity of the spot market is the product of the strict legislation of Venezuela, that has provoked this to have more force. Actually every person or company that needs dollars must go to the Foreign Currencies Administrtion Commission (CADIVI), and this is thorny procedure. Many companies and people have had to go to the spot foreign currencies market to obtain dollars or euros and keep safe.
Banks have done great business with the double dollar quotation, as they buy public debt bonds with the official quotation and they resell them with the value of the dollar from the spot market, these make profits grow.
As it can be seen, the revolution from Venezuela has made possible many business from the power that the crude offers and the income of dollars that there are in the country because of the crude exports.
The dollar situation varies according to the country in which it is, there are some nation in Latinamerica that have some favorable conditions to speculate with the exchange rate.
In February 2003 there was set an exchange control at the foreign currencies market and the price of the dollar went to 1.600 bolivares, and a year later became 1.920, and in 2005 it turned up to be 2.150 bolivares per dollar.
Venezuela has at the moment two markets where you can sell and buy dollars, but of course one is more profitable than the other. One is the official market that since 2005 keeps the exchange rate anchored to 2150 bolivares per dollar, and the other is the parallel or spot market where the dollar quotes from 5000 to 5500 bolivares.
This situation has offered excellent possibilities for those that can speculate with the value of the American currency. The business consists in buying dollars at the official market and resell them at the spot market.
The popularity of the spot market is the product of the strict legislation of Venezuela, that has provoked this to have more force. Actually every person or company that needs dollars must go to the Foreign Currencies Administrtion Commission (CADIVI), and this is thorny procedure. Many companies and people have had to go to the spot foreign currencies market to obtain dollars or euros and keep safe.
Banks have done great business with the double dollar quotation, as they buy public debt bonds with the official quotation and they resell them with the value of the dollar from the spot market, these make profits grow.
As it can be seen, the revolution from Venezuela has made possible many business from the power that the crude offers and the income of dollars that there are in the country because of the crude exports.