Venezuelan President Nicolas Maduro named his cabinet yesterday after this month’s election victory, appointing Nelson Merentes finance minister of the South American country.
Previous finance chief Jorge Giordani, the longest-serving minister under former President Hugo Chavez, was named planning minister, Maduro said in a television address, adding that he had re-appointed Rafael Ramirez as oil minister.
Merentes, who served as finance minister twice under Chavez, was president of the Central Bank before the announcement. Giordani presided over a 32 percent devaluation of the bolivar in February, closed a Central Bank-administered foreign exchange market known as Sitme and saw inflation reach 25.1 percent in March, the second highest rate in 102 economies tracked by Bloomberg.
“It’s a positive sign for the market,” said Asdrubal Oliveros, director of Caracas-based research group Ecoanalitica. “It looks like the government will be more pragmatic in economic matters, but we’re not talking about changing the economic model.”
Maduro was sworn in on April 19 after a week of tension with the opposition over a disputed result that undermined investor confidence. Venzuela’s national electoral council said April 20 that an expanded vote audit would not change the result of the election.
Venezuela, which is seeking to arrest the decline of its currency on the black market after the February devaluation, plans to hold a second dollar auction on a complementary currency system created last month, Ramirez said in an April 7 interview. The country sold $200 million to importers in a March 27 dollar auction without revealing the exchange rate.
The bolivar has declined about 28 percent on the black market this year, according to Dolar Today, a website that tracks the exchange rate on the Venezuelan border with Colombia. The currency currently trades at about 24 per dollar on the black market, compared with 6.3 on the Cadivi system reserved for importers of essential items, such as medicine.
Maduro said on April 15 that the country would “defeat the black market dollar.”
“I think there will be positive changes in terms of foreign exchange policy including better coordination in distributing dollars and more flexible exchange auctions,” Oliveros said yesterday in a telephone interview. “Merentes and Ramirez are more open to issuing new dollar debt than Giordani was. It’s probable that they’ll issue this year.”
Among other appointments yesterday, Maduro re-appointed Ernesto Villegas as information minister, named Jesse Chacon as electricity minister, and kept Jorge Arreaza as vice president.
“I don’t think they are breaking any new ground with Merentes, but Maduro is moving out one of the impediments to a better economy,” Russ Dallen, head bond trader at Caracas Capital Markets, said in an e-mailed response to questions yesterday. “He is a steady hand and does not have the Marxist orthodox rigidity of Giordani.”
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