The Executive branch enacted September 10th the Exchange Agreement No. 1, which was announced by the Minister of Finance, Simón Zerpa, and the president of the Central Bank of Venezuela (BCV), Calixto Ortega Sánchez, September 7th. The agreement establishes the free convertibility of the Sovereign Bolivar, the Venezuelan currency, throughout the country. Hence, the government hopes to foster economic activity and guarantee the stability of the financial market. The document was published in the Extraordinary Official Gazette No. 6,045 and has already come into force.

The Exchange Agreement No. 1 establishes:

• Exchange balance. The BCV and the Ministry of Finance may, jointly, deploy all necessary actions to maintain the balance of the exchange system. Thus, the BCV can only sell foreign currency according to its availability, which is determined by its Board of Directors.
• Operations in foreign currencies. The exchange rate for the purchase and sale of currencies fluctuates freely, according to the supply and demand of natural and legal persons. The exchange rate must be published on the BCV’s website. On the other hand, this institution centralizes the purchase and sale of foreign currency in the country from the public sector and export industries.
• Retail exchange operations. Natural and legal persons who wish to sale foreign currency for amounts equal to or less than US$ 9,856 may do so through authorized exchange houses and banks. The BCV must establish the terms and conditions of the administration of cash in foreign currencies in the exchange market.
• Exchange agents. Natural persons who buy foreign currency from authorized agents must indicate the origin and destination of the money. On the other hand, financial institutions must keep a record of operations carried out in the country in foreign currency and provide this information to the BCV.

Authorized exchange agents, prior to proceeding with foreign currency purchase and sale transactions, must provide the BCV with details of such transactions for monitoring purposes.

• Accounts in foreign currencies. Users may hold funds in foreign currency in banks, which may be transferred or subject to any type of operation. Likewise, banks authorized to receive deposits in foreign currency must send a detailed report of such funds to the BCV on a monthly basis.
• Foreign exchange operations of the private export sector. Natural and legal private persons, dedicated to the export of goods and services, may freely retain and manage up to 80% of the income they receive in foreign currency. The rest will be sold to the Central Bank of Venezuela at the purchase exchange rate.

The measures are framed within the Recovery, Growth and Economic Prosperity Plan. The program, promoted by Venezuelan President Nicolás Maduro, aims to solve the serious economic crisis the country has been undergoing since last year. Other recent important measures are the entry into force of the new currency, the Sovereign Bolivar, and the limitation of the banks’ lending capacity.