Tuesday, March 3, 2015

Another Missed Opportunity for Venezuela


On February 10 of this year, different actors in the national productive sector felt a sigh of relief, including nearly all economic analysts and a good part of the Venezuelan population. On that day, Venezuela’s economic duo Nelson Merentes (president of the central bank) and Rodolfo Marco Torres (the Finance minister) announced a new Exchange Agreement (No. 33), which would involve two separate foreign exchange markets: one of them 100% controlled by the central bank and the other subject to the "controls" of a free market, or at least, one that is almost free. The novelty here, naturally, was the "free" market known as the Foreign Exchange Marginal System (Simadi). As specified in the Exchange Agreement, Simadi consists of three separate markets, each one of them more or less "free" but with limitations: retail market, banking market and securities market. More…

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