VENEZUELA

The Venezuela Central Bank (BCV) on May 8 issued a resolution which introduces modifications to the foreign currency purchase and sale system. This enables banking institutions to act as exchange operators or money markets for their clients, whether individuals or companies. The new measure, set to enter into force next Monday, May 13, replaces the current foreign currency allocation scheme, called Dicom, although this has still not been confirmed by the BCV authorities.

In order to buy or sell foreign currency, interested individuals should contact the authorized exchange operators or use the electronic banking system on any banking business day. In addition, banking institutions acting as money markets must send the BCV the average exchange rate used for all transactions performed during the day on a daily basis.

It should not be ignored that the Venezuelan financial system has been severely impacted by the major economic and political crisis wracking the country. One of the issues is the 100% marginal fund reserve policy which Venezuelan public and private banks must keep deposited in the BCV, while another problem is the threat of U.S. sanctions applied to banks operating with relatives of president Nicolás Maduro.