The Central Bank re-launched the bond market widely used for foreign currency trading in Venezuela under new restrictions that include not only a band of permitted prices which will be updated everyday but more importantly a maximum amount of Dollars a Corporation or a person can purchase on a monthly basis. The band was set today between 4.20 and 5.4 Bsf. per US dollar and the monthly maximums at $416.66 per person and $300,000 per corporation.
In our opinion, the shortage of dollars produced with “this new system” will contribute to a further deterioration of the Venezuelan economy which is already running on very low inventories. We expect important shortages of goods and services, and the highest inflation on the planet.
The Financial authorities tried to convince everyone to the success of the new system but time will prove them wrong. As Samuel Johnson once put it “ Men who cannot deceive others are very often successful at deceiving themselves”
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