Venezuela to auction US dollars to businesses

[Bacchus4.0]

http://news.yahoo.com/venezuela-auction-us-dollars-businesses-211042353.html

CARACAS, Venezuela (AP) -- Venezuela's government plans to auction dollars to private businesses that sell food, medicine and other basic goods amid widespread shortages.

Planning Minister Jorge Giordani said Tuesday the initiative aims to provide such sectors the dollars they need to import goods. Products such as flour, coffee and butter have disappeared from store shelves in recent months.

Venezuela has maintained strict currency controls since 2003, creating a black market that now sells dollars at over triple the official rate of 6.3 bolivars. Falling oil exports and foreign investment have helped dry up the dollar supply.

The auctions starting next week will begin with bidding at the official exchange rate but could sell dollars for much more. The sale price will be set at an average of the highest bids, said a Central Bank official, who was not authorized to speak about the matter and asked not to be identified.

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Looks like the shortages are real despite the graphs we saw the other day about increased agricultural production.

[PDJane]

1. That's because the foodstuff is being exported.

it's like the Irish famine; it has to do with money and political power, not the agricultural ability.

[joshcryer]

2. 2.7 million acres have been redistributed.

This isn't really about foodstuffs being exported. It's about price controls and currency controls.

This is so cronies can make bank. Whoever Giordani chooses will be able to import stuff at will. Whoever Giordani denies, will not. Bye bye small shops (the 2.7 million acre folks), hello boligarchs.

[Bacchus4.0]

3. yeah, they import 70% of the food so that previous comment was just wrong

No incentive for producers given price controls and threat of expropriation.