Wall Street Journal: Venezuela Postpones Press Conference On New Forex Rules

http://online.wsj.com/article/BT-CO-20100517-708999.html?mod=WSJ_latestheadlines
CARACAS -- A Venezuela government press conference scheduled for Monday to explain how newly approved restrictions on currency trading will be enacted has been postponed, officials said.
According to a spokesperson for Finance Minister Jorge Giordani, the minister said the press meeting would instead probably be held Tuesday.
Monday is a banking holiday in Venezuela, but President Hugo Chavez nonetheless announced plans over the weekend for a Monday press conference, and the Information and Communications Ministry confirmed it in a statement Sunday.
Investors in Venezuela are anxious to understand what exactly the new currency trading rules will look like, and market observers say delays will not help the situation.
"The more time that lapses before the new market is formalized, the rougher its launch may become," said Russ Dallen at Caracas-based BBO Financial Services.
Last week, Venezuela's legislature, which is majority-controlled by Chavez' socialist party, quickly passed the currency legislation, which is likely to make it even more difficult for people and companies in Venezuela to conduct currency transactions.
The bolivar has been plunging this year in the free-floating, legally murky currency market, creating a huge gap between its rate and the official, fixed rate.
The government has an official, pegged rate of 4.3 bolivars for $1 and another rate of 2.6 bolivars for $1 for vital goods such as medicine. The unregulated market rate is now above 8 bolivars for $1, more than 25% weaker from the start of the year.
The bolivar's decline has created a huge inflation problem, because most imported consumer products are priced in line with the unregulated rate for the bolivar rather than the official rate.
The new rules approved by Congress will become law when published in the government's Official Gazette, perhaps as early as Tuesday morning. Chavez signed the bill Sunday.
The main new rule would be that it gives the central bank the power to regulate the up-to-now unregulated, free-floating market.
Some analysts say that with this power, the central bank may also decide to create a tightly-controlled trading band between 5 and 7 bolivars per $1, to prevent any sharp drops in the currency.
In the meantime, the free-floating currency market remains mostly closed. The majority of brokerages have refused to make trades for the past week due to concerns that if the trade settles after the new rules are enacted, they may be breaking the new laws.