Venezuelans with remittances in dollars take advantage of the new official par



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Feature: Venezuelans with dollar remittances take advantage of the new official par

The Venezuelan government has managed to attract for the first time in years those who receive remittances of dollars from abroad under strict exchange controls since 2003, after offering an official exchange rate higher than the unregulated parallel market.

Dozens of customers queued on Tuesday in front of Italcambio's offices in Caracas, seeking to exchange their currency for the official channel, after years of resorting to the black market. The company is one of the few authorized by the government to sell and buy foreign currency, but asks for several precautions to get the exchange.

Remittances have increased more and more as nearly three million people have emigrated from the country since 2015, affected by hyperinflation and shortages of food and medicine.

"It's worth coming, at least for now," said Laura España, leaving the offices where she has processed for the second time in recent days the shipments sent by her son from abroad.

For two weeks, the Central Bank of Venezuela (BCV) set the official exchange rate at 3,297 bolivars, a parity that for the first time exceeds the price of the dollar on the black market, which traded around 2,486 bolivars, according to the website of Dolar Today.

The gap surprised local market participants, who for years saw how Nicolás Maduro's government unsuccessfully tried to have Venezuelans change their remittances in the official system without being able to prevent a dollar rise parallel to the rigid exchange rate regime.

After exceeding 3,000 bolivars to the dollar, the unregulated rate fell in recent days amid a tightening of bolivars over a move that forced the bank to sterilize its local currency reserves at the central bank.

Informal market parity, always higher than that established by the BCV, served as a reference for most local economy prices and contributed to pressure on inflation, which according to Congress reached almost two million per cent in 2018.

After the bolivar weakened near 99% on the black market in 2018, the central bank decided to recognize the dollar's price in January and even set a higher rate, very attractive for those seeking to cover their expenses with a few dollars. extras

"I'm asking for help to buy medicine from a person living abroad," said Anggy Ochoa, a student who had to stand in line to withdraw the bolivars four days after processing the shipment. "I do it here because the rate is a bit higher," he added.

Most of those who exchange dollars for dollars generally agree on transactions in person, through social networks or text messages, and transfers of currency are made through foreign accounts.

So did Geovany Villarroel, a bank employee who this time preferred to sell his $ 35 in cash at the government-authorized exchange office and not with relatives who contacted his cell phone. In the office he visited, he said he agreed to buy up to $ 200 per customer and charge a 5% commission for the operation.

Thanks to the attractive official change, agencies like Italcambio are receiving about $ 70,000 a day in cash or remittances last week, ten times higher than the one traded at the end of 2018, a financial sector source said.

It was not possible to get a comment from Italcambio immediately.

Consulting firms estimate that about $ 1 billion of remittances arrive annually.

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