Venezuela increases dollar sales to curb currency depreciation

Golden Ten Data reported on April 9 that, according to foreign media, insiders say Venezuela is intensifying its sales of US dollars to the private sector to curb the depreciation of the domestic currency, the bolivar, and prevent inflation from spiraling out of control again. According to a person directly familiar with the operation, since March 31, the authorities have sold about $330 million through direct foreign exchange interventions. This resumption of direct intervention—after a pause since mid-December last year—highlights the efforts of the Rodríguez interim government to stabilize the exchange rate. Earlier this year, the launch of a dollar auction mechanism did not go smoothly, with uneven supply putting pressure on the parallel market. According to a report released this week by Ecoanalítica, about 80% of the demand for US dollars has been rejected by the Central Bank of Venezuela without explanation. Ecoanalítica analysts noted in the report: "Official foreign exchange supply is highly concentrated among a few entities, and with demand from small and medium-sized enterprises and individuals unmet, funds are flowing into the parallel market. This situation has widened the gap between the official and market exchange rates." Consulting firm Síntesis Financiera stated that in March, the government also sold more than $1 billion on the official foreign exchange market, setting a monthly record since the system was established in 2019.