The more we hear about the new Venezuelan Central Bank foreign exchange system, the more we are convinced that it is deemed for failure. While government officials were celebrating their apparent success in dropping the exchange rate to 5.20 VEBs per US dollar, the offshore market Dollars were being exchanged at 7.80 to 8.20 VEbsf per Dollar.
In our opinion, Venezuelans are and will remain scared of the Chavez administration Gestapo policies of prosecuting people without due cause. According to the capital market regulators president Tomas Sanchez, "The central bank will share information about individuals and companies bidding to buy dollars with the Finance Ministry and Foreign Exchange Board to prevent abuses..."
An if one is lucky enough to avoid prosecution it's because in Venezuela the only law that operates is the law of corruption, which at the end will determine a much higher price for the acquired dollars.
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