Venezuela to Resume FX Auctions After Detecting Currency Fraud

Venezuelan government will resume weekly dollar auctions to companies on Feb. 10 after scrapping this week’s installment because of fraudulent bids.

Central bank will auction $440 million on that date and $220 million a week thereafter, President Nicolas Maduro said on state television yesterday. The auction system which provides companies in selected sectors with dollars at the higher, complimentary rate will be strengthened this year, he added.

“We detected irregularities in the last auction,” Maduro said. “Strange people got involved who have tried to rob the Republic.”

Venezuela will release $42.5 billion of foreign currency to the economy this year, including $11.4 billion through auctions, as at tries to ameliorate dollar shortages that are causing irregular supply of imported goods ranging from shaving blades to milk.

The auction system last sold a dollar for 11.36 bolivars, compared to the primary rate of 6.3.

The government has been limiting the supply of dollars at the primary rate since the start of the year, as reserves hit a 10-year-low. Airlines, Venezuelans traveling abroad and foreigners sending remittances abroad must now use the rate set at auctions, known as Sicad.

Colombians living in Venezuela will now receive pesos instead of dollars when sending money home, Maduro said.

To contact the reporter on this story: Anatoly Kurmanaev in Caracas at akurmanaev1@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

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