Venezuela's exchange rate for remittances weakens sharply: dealer

Venezuela`s exchange rate for remittances of its bolivar currency fell sharply on Monday, according to a rate published by a private exchange house, in what appears to be part of efforts by the crisis-stricken country to reform its distorted currency controls.

The Venezuelan central bank did not respond to requests for comment.

The government of President Nicolas Maduro maintains an official exchange rate of 248,000 bolivars per dollar, while greenbacks on the quasi-legal black market currently fetch more than 4.5 million bolivars.

The government in recent months created a separate exchange rate for remittances sent by the country`s growing diaspora that provides a rate more favourable than the official rate, as part of efforts to reduce operations on the black market.

The remittance rate on Monday moved to 4 million bolivars per dollar from 2.9 million, according to exchange house Zoom, which posts the rate on Twitter based on operations it has carried out through the central-bank administered Dicom forex system.

Zoom did not respond to requests for comment.

Economists routinely identify Venezuela`s currency controls as the principal impediment to a functioning economy in the South American nation, which suffers from hyperinflation and chronic shortages of food and medicine.

The country`s all-powerful Constituent Assembly this month repealed a law criminalizing currency exchange in what Maduro`s allies called a step toward making the socialist economy`s controls more flexible.

Critics insist the government needs to eliminate currency controls all together to allow for industry and commerce to function normally.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)